- Last week ddigital asset investment products saw outflows of more than $50 million.
- According to CoinShares, this could be due to fears that the SEC would reject pending ETF applications.
Digital asset investment products recorded an outflow last week, erasing all of the previous week’s inflows, digital asset investment firm CoinShares found in a new report.
The report found that digital asset investment products saw outflows totaling $55 million last week, compared to inflows of $29 million the previous week.
Source: CoinShares
In addition to last week’s massive deleveraging event that sent Bitcoin [BTC] to the lows last recorded in June, CoinShares believed the outflows could be a “response to recent media highlighting that a decision by the U.S. Securities & Exchange Commission to add a U.S. spot ETF standing is not imminent.”
On August 13, former SEC attorney John Reed Stark tweeted that he believes the SEC will not approve a US spot-based ETF. Stark referred to one letter addressed to the supervisor of Washington non-profit organization Better markets.
Will the SEC approve any of the recent Bitcoin Spot ETF filings?
People often ask in my opinion whether the SEC will approve one of the recent wave of bitcoin spot ETF filings, which is an interesting and important question.
I assume the current SEC… pic.twitter.com/lPXebl03Y4
— John ReedStark (@JohnReedStark) August 13, 2023
According to Better Markets, SEC should deny ETF applications because spot BTC markets:
“have a history of artificially inflated trading volumes due to rampant manipulation and wash trading, are highly concentrated and rely on a select group of individuals and entities to maintain the bitcoin network.”
In addition to last week’s outflow, CoinShares further found that trading volumes remained below the annual average. Last week’s panic sell-off caused the value of total assets under management (AuM) to drop 10%.
Bitcoin suffered the most blows
Bitcoin investment products accounted for the bulk of last week’s outflows at $42 million. This represented 76% of all funds withdrawn from the market during the reporting period.
After three weeks of seeing investors bring in money, Bitcoin investment products recorded their first inflow in August the previous week, totaling $27 million. However, with the inflows recorded last week, the asset’s outflow to date has reached $101.9 million, CoinShares found.
Continuing the trend of outflows, Short Bitcoin products saw the $2.2 million removal last week.
The altcoins were not spared
Last week, altcoins also suffered outflows. As reported by CoinShares, leading alt Ethereum [ETH] recorded outflows of $9 million, completely wiping out the $2.5 million in inflows it saw the previous week.
Likewise other altcoins, such as Polygon [MATIC]Litecoins [LTC]and Polkadot [DOT] witnessed outflows of $900,000, $600,000 and $500,000 respectively.