All you need to know as weekly crypto outflows cross $9 mln

Posted: September 26, 2023

• Last week digital asset investment products saw minor outflows of $9 million.
• Leading coin Bitcoin accounted for 66% of all funds removed from crypto funds. 

Digital asset investment products recorded outflows totaling $9 million last week, marking the sixth consecutive week of outflows, digital asset investment firm CoinShares found in a new report.

The low interest in digital assets last week was reflected in the decline in trading volume.

CoinShares noted,

“Volumes were low at US$820m for the week, well below the US$1.3bn average for the year so far, matching a similar low volume trend in the broader digital asset market.” 

As bearish sentiments plagued the digital asset investment products market, the year-to-date (YTD) net inflows fell below $100 million. Last week, YTD net inflow totaled $40 million, dropping by 22% from the $51 million recorded the previous week. 

Due to the ongoing regulatory uncertainty surrounding crypto in the USA, investors in the region removed $14 million from crypto fund outflows last week. Conversely, in Europe, inflows almost touched $20 million during the same period.

CoinShares attributed the divergence in fund flows between the two regions to European investors ” seeing recent regulatory disappointment as an opportunity.”

Bitcoin and Short-bitcoin products 

With $6 million withdrawn from crypto funds last week, Bitcoin [BTC] investment products accounted for almost 66% of the total outflows recorded. This brought its month-to-date outflows to $124 million, rising by 5% from the previous week’s $118 million.

Regarding its YTD flows, BTC’s net inflows continued to plummet as the price remained below $27,000 for most of last week.

On 19 September, the leading coin traded briefly above $27,000 to exchange hands at a high of $27,399 before reversing the uptrend. According to CoinShares, BTC’s YTD net inflows fell to $148 million last week, down 5% from $55 million the previous week.

As for Short-bitcoin products, they witnessed an outflow of $3 million from crypto funds last week. CoinShares added:

“The US$15m inflows into short-bitcoin for one week this month look more like an isolated event as there have been outflows totaling 78% of assets under management (AuM) over the course of the last 22 weeks, suggesting investors are continuing to capitulate over their short positions.”

The fact that there have been large outflows from short-bitcoin products over the past 22 weeks suggests that investors are not generally bearish on the leading coin despite its recent price movements.

While positive sentiment has remained at its lowest, investors do not generally believe that the coin’s price will go down significantly in the near future. Hence the shortage of funds in short-bitcoin products.

Ethereum continues to be disappointing

Ethereum [ETH] recorded its sixth week of consecutive outflows as it saw the redemption of funds totaling $2.2 million last week. During the same period, Solana [SOL] and Ripple [XRP] registered inflows of $300,000 and $700,000 respectively. 

As for multi-asset investment products, they “have also suffered this year, seeing a small but steady trickle of outflows that now total US$32m for the year so far.”