- For the first time in the past four weeks, investment products experienced outflows.
- Investors shied away from Bitcoin, with altcoins drawing all the inflows.
For the first time in the past month, digital asset investment products experienced outflows totaling $6.5 million, ending four weeks of cumulative inflows of $742 million, CoinShares found in a new report.
Last week’s trading volumes of $1.2 billion for investment products were lower than the average weekly volume for the year, according to the digital asset investment firm. This represented a 39% drop from the previous week’s volume of $2.4 billion.
Last week’s outflow and associated drop in trading volumes signaled a negative shift in investor behavior and sentiment towards this asset class. The drop in trading volumes specifically indicated a temporary slowdown in market activity or a cautious approach to investors due to various factors that can affect market dynamics.
Source: CoinShares
Bitcoin: A Story of How the Mighty Coin Fell
After being the most preferred investment vehicle by investors for several weeks, Bitcoin [BTC] suffered outflows totaling $13 million last week.
Last week’s BTC outflows flooded the market after several weeks of inflows driven by positive investor sentiment following the influx of exchange-traded fund (ETF) applications in June.
BlackRock signed up for a coveted spot in the BTC exchange-traded fund (ETF) on June 15. This move sparked a wave of competitors to follow suit and renew their own ETF filings.
Consequently, investors reacted enthusiastically, leading to a rapid flow of money into BTC-focused investment funds over the next month. Notably, this increase in investment marked the fastest pace since October 2021.
Things didn’t get any better, Short Bitcoin investment products recorded their 13th week of consecutive outflows. According to CoinShares:
“Short bitcoin total assets under management (AuM) represented 1.3% of total bitcoin investment products at its peak. That has now fallen to just 0.4%, the lowest level since June 2022.”
Source: CoinShares
Altcoins are last week’s winners
Negative investor sentiment has largely outrun leading altcoin Ethereum [ETH], since the beginning of the year. However, while BTC and Short-BTC faced liquidity withdrawal:
“Ethereum topped the leaderboard last week, with US$6.6 million inflows, suggesting that sentiment, which has been bad this year, is slowly starting to turn,” CoinShares found.
Further, Ripple’s “controversial” token XRP registered $2.6 million inflows, bringing its 11-week inflow to $6.8 million or 8% of all asset inflows under management. According to the report, “this means that investors are increasingly confident about the outlook for XRP.”
Other altos, including Solana [SOL]Uniswap [UNI]and Polygon [MATIC]registered small inflows of $1.1 million, $700,000 and $700,000 respectively.