Last week’s crypto market witnessed a significant capital movement, where investment products related to digital assets experienced outflows amounting to $21 million.
Weekly Market Overview
The recent report from CoinShares highlighted a modest outflow from crypto investment products, totaling $21 million in the last week. This figure, however, contrasts with the unexpectedly high Bitcoin trading volumes, which reached a staggering $11.8 billion. This volume is nearly sevenfold the average seen throughout 2023, indicating a noteworthy divergence in investment behavior.
Geographical Investment Shifts
A closer look at the geographical distribution reveals a significant influx of $263 million into the United States, overshadowing the outflows from Canada and Europe, which cumulatively sum up to $297 million. Analysts are attributing this trend to a shift of assets towards the US market.
Asset-Specific Movements
Delving into specific cryptocurrencies, Bitcoin products saw relatively small outflows of $25 million, yet represented a majority (63%) of all BTC trading volumes on trusted exchanges. In contrast, Ethereum and Solana-based products witnessed outflows of $14 million and $8.5 million, respectively.
The Role of ETPs
Exchange-Traded Products (ETPs) have been dominating the trading scene, with established issuers in the US feeling the pressure as they experienced outflows of $2.9 billion since the advent of spot Bitcoin ETFs. Interestingly, these new ETFs have attracted $4.13 billion, suggesting a shift in investor preference towards more cost-effective investment vehicles.
Investor Strategies and Predictions
Despite recent price dips, investors have been keen on adding to their short Bitcoin investment products, garnering an influx of $13 million. Overall, US ETFs have enjoyed net inflows of $1.2 billion since their inception. BTCData’s Senior IT architect, Chris Jay Terry, forecasts a further outflow of $25 billion from the largest spot Bitcoin ETF, GBTC. Within six days of trading, GBTC has already seen a net outflow of $2.8 billion. Experts from JPMorgan Chase bank anticipate the fund to lose around $13 billion, with a considerable portion expected to be redistributed to other sector-specific products.
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