Posted:
- Digital assets recorded their first outflows in almost three months last week.
- This was the result of a strong increase in profit taking.
Capital flight from investment products totaled $16 million last week, marking a potential shift in sentiment after a period of sustained bullishness, digital asset investment firm CoinShares found in a new report.
A wave of investor withdrawal swept through the digital asset market during the reporting period, washing away eleven weeks of steady inflows.
According to the investment firm, weekly trading volume rose above this year’s average despite the recorded outflows.
CoinShares noted:
“However, trading activity remained well above the annual average, totaling $3.6 billion this week, compared to the annual average of $1.6 billion.”
Regionally, the bulk of liquidity outflows from crypto funds last week came from the US and Germany, with outflows of $18 million and $10 million respectively.
In contrast, Canada and Switzerland both recorded small inflows of $7 million and $9.1 million, respectively.
This led CoinShares to think:
“The mixed regional flows suggest this was more related to profit-taking rather than a turnaround in sentiment towards the asset class.”
Bitcoin was hit the hardest
During the reporting week, investment products were supported by the leading crypto Bitcoin [BTC] recorded an outflow of $33 million.
Significant inflows into BTC-backed products over the past two months pushed the coin’s year-to-date (YTD) above $1.5 billion. While it was closer to $2 billion, it totaled $1.67 billion, despite the fund being cut last week.
On a monthly basis, the report showed that BTC recorded a net positive fund flow of $7 million.
Within the week under review, BTC’s assets under management (AUM) totaled $36 billion, representing a 72% share of the entire market’s total AUM of $50 billion.
As for short Bitcoin products, they recorded a small outflow of $300,000.
Ethereum failed while other alts excelled
Within the altcoin ecosystem, the leading altcoin Ethereum [ETH], recorded the most outflow. The second-largest cryptocurrency by market capitalization saw outflows of $4.4 million during the review period.
This followed A period of six weeks of the consecutive fund flows into ETH-backed assets, which amounted to $19 million. On an annual basis, the currency’s outflows amounted to $129.4 million.
As for other alts:
“Altcoins bucked the trend and saw an inflow of $21 million. The main beneficiaries are Solana, Cardano, XRP and Chainlink, with a total amount of $10.6 million, $3 million, $2.7 million and $2 million respectively.