- May 6, 2023
- Posted by: [email protected]
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According to the recent data from European cryptocurrency investment firm CoinShares, digital asset investment products experienced outflows totalling $72 million last week, with the bearish sentiment being attributed to the anticipation of further interest rate hikes by the US Federal Reserve this week. The report notes that crypto market funds across all geographies and providers saw outflows, particularly in Germany and Canada, where outflows reached $40 million and $14 million, respectively. Bitcoin recorded the largest outflows at $46 million, with short-Bitcoin also experiencing outflows of $7.8 million, its highest figure since December 2022. Despite the recent outflows, short-Bitcoin continues to lead in inflows for the year, with net inflows of $119 million. Meanwhile, Ether products saw outflows amounting to $19 million, marking the biggest weekly outflows since the Merge in September 2022.
On a positive note, a few altcoin funds experienced minor inflows, with Solana, Algorand, and Polygon each gaining less than $1 million in capital flows. Blockchain equities also experienced negative sentiment, resulting in outflows of $2.5 million last week, although the year-to-date net flows remain positive at $27 million.
CoinShares researcher James Butterfill wrote in the report that while volumes remain subdued for the broader crypto market, ETP investment product volumes at $1.7 billion for the week are 16% above the year-ago average.
Despite significant price fluctuations over the past week, resulting in $340 million worth of leveraged BTC futures contract liquidations, Bitcoin has increased 72% this year, outperforming the S&P 500 index’s 9% gain.
Investors are bracing for the Fed’s forthcoming rate decision, which could potentially cause further volatility in the market. The report suggests that this uncertainty has caused some investors to take a more cautious approach, resulting in the recent outflows. However, it is worth noting that some altcoins, such as Solana, Algorand, and Polygon, have seen minor inflows, indicating that there is still some investor interest in the market.
Overall, the digital asset market has experienced bearish sentiment for the second consecutive week, with outflows totalling $72 million. While Bitcoin recorded the largest outflows at $46 million, short-Bitcoin continues to lead in inflows for the year, with net inflows of $119 million. The report suggests that the anticipation of further interest rate hikes by the US Federal Reserve this week has caused some investors to take a more cautious approach, resulting in the recent outflows. However, some altcoins, such as Solana, Algorand, and Polygon, have seen minor inflows, indicating that there is still some investor interest in the market.
