Crypto investment products are now going through tough times as evidenced by the inflows and outflows data. The crypto market is known for its volatile market cycles of ups and downs. Investment products are currently struggling, and confidence in the sector appears to have been shaken. Crypto funds have now seen outflows for three consecutive weeks, with investors pulling $435 million from digital asset funds last week, according to CoinShares data. The recent outflows underscore the deteriorating investor sentiment around some digital assets following the bull run earlier this year.
The third consecutive week of cryptocurrency withdrawals
Coin Shares’ recent weekly report on digital asset fund flows has exposed the current sentiment among institutional investors. According to the report, mutual funds witnessed an outflow of $435 million last week, the largest outflow since March. This is in addition to the $206 million and $126 million raised the previous two weeks. Unsurprisingly, most of the outflow came from Bitcoin funds. Of the total outflows of $435 million, $423 million came from Bitcoin funds. Notably, much of the Bitcoin outflow ($328 million) came from Spot Bitcoin exchange-traded funds (ETFs) in the US.
A look at past crypto fund flow data since the start of the year shows that most of the inflows in January, February and March can be attributed to the Spot Bitcoin ETFs. These ETFs recorded such large fund inflows that investment products posted their best year ever in less than three months.
However, inflows into these ETFs have slowed in recent weeks, and the largest digital asset is now failing to attract inflows amid interest rate stagnation in the US market. In particular, Grayscale’s GBTC continued its streak of withdrawals, recording outflows of $440 million. At the same time, the other ETFs failed to attract inflows during the week to offset these pullbacks. For example, BlackRock’s IBIT failed to record inflows for three days in a row last week, causing the 71-day the inflow comes to an end.
Ethereum, the altcoin king, also witnessed an outflow of $38.4 million last week to offset inflows into other altcoins. Inflow data shows that investors are putting $6.9 million in inflows into multi-currency investment products. Solana, Litecoin, XRP, Cardano and Polkadot witnessed $4.1 million, $3.1 million, $0.4 million, $0.4 million and $0.5 million in inflows respectively. Short Bitcoin products also witnessed an inflow of $1.3 million, showing a glimpse of investor sentiment.
What’s next?
Investor sentiment can change quickly in the fast-paced crypto space and the coming weeks could provide more clarity on the direction of crypto fund flows. Six Spot Bitcoin and Ether exchange-traded funds (ETFs) are ready to start in Hong Kong today April 30. Their entry into the Asian market was long expected and that is true expected to exceed the first-day inflow record of their US counterparts.
Total market cap drops amid outflows | Crypto total market cap from Tradingview.com
Featured image of StormGain, chart from Tradingview.com
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