In the past nine weeks, cumulative outflows from crypto investment products have exceeded $450 million.
According to a recent report by CoinShares, an asset manager, it has been observed that over the past nine weeks, there have been significant outflows from crypto exchange-traded products (ETPs), totaling around $455 million. This data indicates a prevailing negative sentiment towards cryptocurrencies.
Crypto exchange-traded products aim to replicate the movements of crypto prices. When these funds’ shares fall below their designated prices, they automatically trigger sales of cryptocurrencies, resulting in outflows.
In the lead-up to Sept 18, there were consecutive outflows totaling $54 million over a nine-week period. Interestingly, only one week during this frame saw any inflows. Bitcoin emerged as the primary contributor to these outflows accounted for, representing a staggering 85% of the total amount withdrawn across all exchange-traded products. In the previous week alone, ETPs sold over $45 million worth of Bitcoin into the market.
Regional Insights: 77% Of Crypto ETP Outflows Stem from The United States
The deluge of selling spared no mercy, even reaching the ether funds, which witnessed outflows totaling approximately $5 million last week.
Last week, select ETPs that track altcoins showed strong performance. Solana (SOL) ETPs experienced net inflows of $700,000, Cardano (ADA) saw an increase of $430,000, and XRP (XRP) recorded an additional $130,000.
CoinShares provided data on the regional origins of crypto ETP outflows. The majority, 77%, came from the United States, followed by Germany, Canada, and Sweden, which also accounted for a significant percentage of the outflows.
However, Crypto ETPs pose a convenient avenue for investors with traditional financial accounts to engage in digital asset investments. However, the establishment of a spot Bitcoin exchange-traded fund has encountered various regulatory and legal obstacles within the United States.
Additionally, in March, the Securities and Exchange Commission (SEC) rejected VanEck’s proposal for a Bitcoin Trust. On Aug 11, a U.S. federal appeals court determined that the SEC’s denial of Grayscale’s Bitcoin ETP proposal had been deemed “arbitrary and capricious.”
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“The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.”
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