Last week, outflows from digital asset investment products reached $168 million, with Bitcoin accounting for $146 million of the total. This is the highest weekly outflow since March 2023, according to a report by CoinShares. The decline in sentiment towards cryptocurrency contributed to the outflows.

Crypto Market Sees $168 Million Outflows

The latest report from CoinShares reveals that outflows from crypto products totaled $168 million in the week ending August 25, marking the largest outflow since March 2023 when the US Securities and Exchange Commission (SEC) initiated regulatory actions against major exchanges. The report also highlights the negative sentiment in the market, with exceptionally low trading volume contributing to the trend. In fact, CoinShares data indicates that investment products traded $1.3 billion last week, which is 16% below the year’s average.

James Butterfill, head of research at CoinShares, stated, “This negative sentiment we believe is due to the increasing acceptance that a spot-based ETF for Bitcoin in the US is likely to take longer than many expect, with recent delays being announced by the SEC.”

Bitcoin Remains in the Lead

The sell-off in the crypto market has affected Bitcoin, with the benchmark cryptocurrency dropping to lows of $25,350. The struggle to rise above $26,000 highlights the overall market apprehension, which is reflected in the outflows from Bitcoin investment products. While outflows amounted to $149 million last week, Bitcoin’s net flows for the year remain positive at approximately $265 million. Additionally, investors are increasingly closing their short positions, with $4 million in outflows recorded last week, marking an 18-week streak of outflows. Currently, shorts outflows account for 89% of the total Assets under Management (AuM).

Other cryptocurrencies also saw changes in investment flows. Ethereum recorded outflows of $17 million, while XRP and Litecoin experienced minor inflows of $0.5 million and $0.44 million, respectively.

FAQs

What were the outflows from digital asset investment products last week?

Last week, outflows from digital asset investment products reached $168 million.

How much of the outflows were attributed to Bitcoin?

Bitcoin accounted for $146 million of the total outflows.

When was the last time there were outflows at this level?

The outflows last week were the highest since March 2023, when the US SEC began its regulatory crackdown on major exchanges.

What is the reason behind the negative sentiment in the market?

According to James Butterfill, head of research at CoinShares, the negative sentiment is due to the perception that a spot-based Bitcoin ETF in the US will take longer to launch than expected, with recent delays announced by the SEC.

Which other cryptocurrencies saw changes in investment flows?

Ethereum recorded outflows of $17 million, while XRP and Litecoin had minor inflows of $0.5 million and $0.44 million, respectively.

Summary

Last week, outflows from digital asset investment products, including Bitcoin, reached the highest level since March 2023. The decline in sentiment towards cryptocurrency and exceptionally low trading volume contributed to the trend. Bitcoin’s net flows remain positive for the year, with investors increasingly closing their short positions. Ethereum saw outflows of $17 million, while XRP and Litecoin experienced minor inflows.