Bitcoin Leads $1.2 Billion Crypto Outflow as Investor Pessimism Rises: CoinShares Report

• Institutional investors continued to withdraw funds from crypto investment products last week, marking the second consecutive week of notable outflows.
• This recent trend is attributed to investor pessimism regarding potential interest rate cuts by the U.S. Federal Reserve.
• CoinShares reports reveal that the lowest trading volumes for Exchange-Traded Products (ETPs) have been recorded globally since the inception of US ETFs.

Crypto investment products face another week of significant outflows as investor sentiment remains bleak.

Institutional Outflows Continue for the Second Week Running

In a recent report from CoinShares, the firm highlighted that digital asset investment products experienced outflows totaling $584 million last week. This follows a $600 million outflow the week prior, cumulatively reaching $1.2 billion over the two-week period. This ongoing withdrawal underscores investor skepticism surrounding the possibility of interest rate cuts by the Federal Reserve within the current year.

Regional Impact on Outflows

The outflows were primarily driven by investors in the United States and Canada, which alone accounted for the $584 million decrease. Other regions such as Germany and Hong Kong also faced reductions, losing $24 million and $19 million respectively. Conversely, Switzerland and Brazil saw inflows of $39 million and $48.5 million, signaling a more optimistic sentiment in these regions.

Bitcoin and Altcoins Lead the Outflows

Bitcoin (BTC) was hit hardest, leading the outflows with $630 million. Ethereum (ETH) followed with a $58 million outflow, while smaller amounts were seen across various altcoins: Cardano (ADA) with $0.3 million, Solana (SOL) with $2.7 million, Litecoin (LTC) with $1.3 million, and Polygon (MATIC) with $1 million. However, multi-asset products experienced a contrasting trend, attracting $98 million in inflows, suggesting that some investors are seizing the opportunity to buy into the altcoin market during its weakness.

Conclusion

The recent outflows from crypto investment products reflect a broader sense of pessimism among institutional investors, likely influenced by uncertainties surrounding U.S. Federal Reserve policies. While some regions and assets are bucking the trend with inflows, the overall market sentiment remains wary. Investors are advised to stay informed and consider the potential risks and opportunities as the market continues to evolve.