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.
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.
This article originally appeared on The Tokenist
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