Posted:
- Digital asset investment products saw outflows of nearly $60 million last week.
- Bitcoin accounted for 85% of all withdrawn funds.
Digital asset investment products recorded outflows totaling $54 million last week, marking the fifth straight week of outflows, digital asset investment firm CoinShares found in a new report.
Read Bitcoin’s [BTC] Price forecast 2023-24
As the report highlighted, liquidity worth $455 million was removed from crypto exchange-traded products during eight of the past nine weeks.
This suggested that crypto market participants harbored mostly bearish sentiments toward the assets that make up the asset class. As a result, year-to-date (YTD) net inflows fell below $100 million, CoinShares noted.
Germany, Canada and Sweden in particular also experienced negative sentiment. However, US investors accounted for 77% of all crypto fund outflows last week. The prevailing negative sentiment in the US could be primarily due to the continued uncertainty surrounding crypto regulation in the region.
Despite recent setbacks in court, in his testimony Before the Senate Banking Committee hearing on September 12, Securities and Exchange Commission (SEC) Chairman Gary Gensler reiterated his position that crypto assets are securities and should be regulated by his agency.
According to Mr. Gensler:
“There is nothing about the crypto asset markets that suggests that investors and issuers are less deserving of the protection of our securities laws…Given that most crypto tokens are subject to securities laws, it follows that most crypto intermediaries must also comply with securities laws.”
Bitcoin is suffering the most
Bitcoin [BTC] Among investment products, $45 million was withdrawn from crypto funds last week, accounting for almost 90% of the total registered outflows. With the leading coin registering only outflows since the beginning of the month, last week’s liquidity exit took the coin monthly outflows up to $118 million.
Furthermore, the currency’s net inflows have continued to decline weekly since the beginning of the year as sentiment worsened. Last week, BTC net inflows fell to $155 million, compared to $200 million the week before.
After 19 weeks of consecutive outflows, short Bitcoin products recorded “the largest week of inflows since March 2023” last week. However, this “proved to be short-lived” as the asset class saw outflows of $3.8 million last week.
But despite the recent problems,
“It remains the most popular investment product with a monthly inflow of $12 million.”
Ethereum is taking a backseat
While other leading altcoins posted inflows, altcoin Ethereum led [ETH] witnessed recordings worth $4.8 million. This brought YTD outflows to $118 million.
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CoinShares believed that the liquidity exit occurred,
“Despite what we believe are attractive investment fundamentals and high demand for returns.”
The report further revealed that,
“Other altcoins, such as Binance and Polygon, saw small outflows of $0.3 million each. Some altcoins continue to buck the trend, with Solana, Cardano and XRP all seeing inflows of $0.7 million, $0.43 million and $0.13 million respectively.