BTC-2.10%
Crypto
Digital Asset Investment Products Saw Outflows of $55M Last Week: Report
Crypto-related investment funds recorded $55 million in outflows last week amid the latest broader market downturn.
Editorial disclosureRead more
All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.
Digital asset investment products saw $55 million in outflows last week, reversing the prior week of positive flows, a new report reveals. The shift comes amid deteriorating investor sentiment triggered by a sector-wide market downturn.
Bitcoin Funds See $42M in Outflows
Outflows in digital asset investment funds rose to $55 million last week amid the industry-wide downturn that sent crypto prices tumbling and pushed market volumes significantly below average. According to CoinShares, one factor that may have contributed to rising outflows are recent reports suggesting that a decision by the US Securities and Exchange Commission (SEC) on a spot Bitcoin exchange-traded fund (ETF) is not imminent.
Bitcoin accounted for most outflows at $42 million, marking a sharp U-turn from the week prior. Meanwhile, short-Bitcoin investment products registered outflows for the 17th straight week, totaling $2.2 million.
Apart from Bitcoin, major altcoins also saw noteworthy outflows. Notably, Ethereum-related funds registered $9 million, while Polygon, Litecoin, and Polkadot saw outflows of US$0.9m, US$0.6m, and US$0.5m, respectively.
On a regional basis, the negative fund flows were primarily concentrated in Canada and Germany, with 36 million and $11 million in outflows last week, respectively. Switzerland, on the other hand, recorded inflows of $3.5 million.
Join our Telegram group and never miss a breaking digital asset story.
Why Are Crypto Prices Down?
The steep downturn in fund flows comes amid the latest crash in crypto prices that pushed the global cryptocurrency market cap from $1.22 trillion to $1.09 trillion over the past week. Bitcoin was on track to record its worst weekly slump since the FTX collapse in November 2022 on Thursday, sending the leading cryptocurrency to as low as $25,392 on that day.
Investors hoped a court decision in the legal dispute between investment management firm Grayscale and the SEC could reverse the losses. Notably, DCG subsidiary Grayscale strives to convert its $12 billion GBTC bitcoin trust into an ETF, which could garner significant attention among institutional investors.
The SEC initially rejected the application, leading to Grayscale filing the lawsuit to overturn the decision. The crypto community hoped to learn the court’s verdict on Friday, but no decision on the lawsuit was announced.
Do you think the SEC will eventually approve the recently filed applications for spot Bitcoin ETFs? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
