Bitcoin Outflow Reaches $630 Million as Crypto ETP Trading Volume Hits Record Low During Market Correction
The latest report from CoinShares indicates a notable downturn in the crypto market, with investors withdrawing a substantial $584 million from crypto-related investment products in the past week. This decline is further emphasized by the global trading volumes for crypto ETPs hitting their lowest levels since the approval of several spot Bitcoin exchange-traded funds by the US Securities and Exchange Commission in January, amounting to just $6.9 billion for the week.
This trend of outflows follows the previous week, where investors pulled out around $600 million, resulting in a total of nearly $1.2 billion in outflows over the two-week period. James Butterfill, CoinShares’ head of research, attributed this trend to investor pessimism surrounding the potential for interest rate cuts by the Federal Reserve this year.
Bitcoin investment products saw the most significant outflows, totaling $630 million, with Bitcoin ETPs experiencing six consecutive days of outflows in the US, primarily from Grayscale Bitcoin ETF and Fidelity’s FBTC. Canada also witnessed substantial outflows from crypto ETPs, with $109 million withdrawn, followed by Germany and Hong Kong with outflows of $24 million and $19 million, respectively.
Conversely, Switzerland and Brazil recorded inflows of $39 million and $48.5 million, respectively, helping to offset the overall outflows. Additionally, investors with bearish sentiments withdrew about $1.2 million from short Bitcoin products.
In a surprising turn, Ethereum joined the outflow trend, experiencing its first withdrawals in weeks, totaling approximately $58 million and reducing its month-to-date flow to around $23 million from $82 million.
Despite the outflows from major digital assets like Bitcoin and Ethereum, multi-asset investment products and some altcoins saw significant inflows. Multi-asset products attracted over $98 million, while Solana, Litecoin, and Polygon received $2.7 million, $1.3 million, and $1 million, respectively. Butterfill noted that these inflows indicate a shift in investor focus towards altcoins, suggesting that investors view the weakness in the altcoin market as a buying opportunity.
In conclusion, the crypto market is experiencing significant fluctuations with notable outflows from major assets like Bitcoin and Ethereum, while some altcoins are attracting investor interest amidst the market turbulence. This dynamic landscape underscores the evolving nature of the crypto market and the diverse investment strategies being employed by market participants.
