CoinShares Report: Crypto Funds Witness $500M Outflows In 9 Weeks

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as the primary contributor to these outflows accounte­d for, representing a stagge­ring 85% of the total amount withdrawn across all exchange-trade­d products.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.”

Related Reading | DeFi Market Faced a 15% Drop in August: VanEck’s Report

“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.”

Comments (No)

Leave a Reply