Bitcoin Leads $726 Million Outflow, Impacting Digital Assets
September 9, 2024
Digital asset investment products experienced significant outflows amounting to $726 million, matching the peak outflow seen earlier in March this year, as stated in the most recent report from CoinShares.
James Butterfill, head of research at CoinShares, attributed this negative sentiment to the stronger-than-expected macroeconomic data from the previous week, which raised the likelihood of a 25-basis point interest rate hike by the US Federal Reserve.
Butterfill mentioned that daily outflows decelerated later in the week due to employment data falling short of expectations. This left market sentiments divided on the possibility of a 50-basis point rate cut. The market is now eagerly anticipating the Consumer Price Index (CPI) inflation report on Tuesday, with a 50-basis point cut seeming more probable if inflation is below expectations.
Bitcoin led the outflows, losing $643 million, contributing to its monthly outflows reaching $645 million. Conversely, short BTC funds experienced minor inflows of $3.9 million.
In the US, Bitcoin exchange-traded funds (ETFs) witnessed an eight-day streak of outflows, resulting in net outflows of $721 million in the country. Fidelity’s FBTC fund accounted for the majority of this, with $405 million in outflows last week.
Following Fidelity, Grayscale’s GBTC saw $280 million in outflows, while Bitwise ETFs rounded off the top three for the week with losses of approximately $60 million.
Canada also recorded outflows of $28 million. In contrast, Europe displayed a more positive outlook, with Germany and Switzerland observing inflows of $16.3 million and $3.2 million, respectively.
Altcoins experienced varying fortunes. Ethereum-based investment products recorded $98 million in net outflows last week, primarily due to Grayscale’s converted ETHE fund, which lost $111 million during the period. This led to minimal inflows into other spot Ethereum ETF products failing to offset the substantial outflows, indicating a lack of demand for these investment products.
On the other hand, Solana-based investment products secured $6.2 million in net inflows, the highest among digital asset products. Other digital assets like Cardano saw outflows of around $800,000 despite completing the first phase of its highly anticipated Chang Hard Fork. In contrast, Litecoin and XRP products saw combined inflows of $1.7 million.
In conclusion, the cryptocurrency market experienced significant fluctuations in investment product flows, with Bitcoin leading the outflows while altcoins displayed mixed performances. The market awaits further economic indicators to gauge future trends in digital asset investments.
