Bitcoin Investment Vehicles Witness Largest Weekly Outflows Since March, Recording a Total of $111 Million, According to CoinShares Data

For the week ending on August 4, the cryptocurrency investment landscape saw a substantial outflow of $107 million, marking the continuation of a three-week trend of negative movement that has cumulatively reached $134.8 million.

Once again, Bitcoin took the spotlight in terms of movement. With a significant outflow of $111 million, Bitcoin funds accounted for the lion’s share of the week’s movement, effectively offsetting a large portion of the inflows observed.

According to the “Digital Asset Fund Flows” weekly report by CoinShares, this trend underscores a prevalent pattern of “profit-taking” following gains from the previous cycle. During the month preceding the recent series of outflows, a substantial $742 million flowed into cryptocurrency funds, with an overwhelming 99% of this total attributed to Bitcoin.

The report also highlighted that weekly trading volumes in investment products dipped below the year-to-date average. Furthermore, on-exchange market volumes experienced a sharp decline of 62% when compared to the relative average.

Geographically, the only regions displaying inflows were Australia and the United States, with incoming funds of $0.3 million and $0.2 million, respectively. In contrast, the most significant outflows originated from Canada, amounting to $70.8 million, followed by Germany with $28.5 million in outflows.

Despite the outflows witnessed in Bitcoin, the weekly total was somewhat propped up by inflows into Solana, totaling $9.5 million—an increase from the previous week’s inflows of $0.6 million. Additionally, XRP investment products also experienced inflows, albeit on a smaller scale, totaling $0.5 million.

Ether funds, however, continued their downward trajectory, with an outflow of $5.9 million, compounding the previous week’s outflow of $1.9 million. This effectively nullified the prior inflows of $6.6 million and further distinguished it from Solana’s current bullish trend.

Despite Bitcoin’s positive performance throughout the year compared to its January opening, experts have attributed some of its perceived sideways movement, which has largely kept it below the $30,000 mark since April, to overall market uncertainty.

Previous reports from Switzerland-based investment adviser 21e6 Capital AG indicate that Bitcoin “hodlers,” those who held funds in BTC, outperformed crypto funds by an impressive 69% during the first half of 2023.

The collapse of FTX in 2022, coupled with regulatory and legal uncertainties surrounding various other exchanges, might have compelled investors in crypto funds to increase their cash reserves as opposed to deploying more funds. This cautious approach may account for the current trend of outflows.

Notably, the report from 21e6 Capital AG hinted at a slight uptick in investor sentiment compared to the first half of 2023.

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