Crypto Investment Outflows Continue
Crypto investment products at asset managers like Grayscale, 21Shares, Bitwise, and ProShares experienced outflows of $11.2 million in the past week. This adds to a multi-week streak totaling $342 million.
While the outflows cooled off considerably from the $168 million seen in the previous week, there is some hope that negative sentiment is turning around, especially with bitcoin products defying the trend, as stated by CoinShares Head of Research James Butterfill in the digital asset manager’s latest report.
Fluctuations in Investor Flows
This year has been marked by significant fluctuations in investor flows, primarily driven by ongoing concerns and hopes regarding digital asset regulations. Last week exemplified this sentiment, according to Butterfill.
Regulatory Rollercoaster
The week started with high hopes for a spot bitcoin exchange-traded fund (ETF) in the United States. Optimism surrounding the prospect of approval increased after the United States appeals court overturned the Security and Exchange Commission’s (SEC) block on Grayscale’s proposal on Tuesday.
However, overall sentiment was knocked down as the SEC delayed seven spot bitcoin ETF applications from BlackRock, Fidelity, VanEck, WisdomTree, Invesco, Bitwise, and Valkyrie until mid-October on Thursday.
Surge in Trading Volumes
Despite subdued flow activity, trading volumes surged, reaching $2.8 billion for the week, which is approximately 90% above the year-to-date average. Despite the regulatory rollercoaster, year-to-date digital asset investment products still boast a net inflow position of $165 million.
Bitcoin Defies the Trend
While the broader digital-asset fund market continued to experience outflows, bitcoin products bucked the trend by recording inflows totaling $3.8 million last week. On the flip side, short bitcoin positions witnessed outflows for the 19th consecutive week, amounting to $3.3 million, with total assets under management down 48% from this year’s peak.
Solana investment products were another notable exception, registering inflows for the ninth straight week, bringing in $0.7 million. However, Polygon and Ether products faced outflows of $8.6 million and $3.2 million, respectively.
Regional Trends
Regionally, Germany led the market with outflows totaling $26.9 million, while Switzerland recorded the most inflows at $14.8 million. The U.S. saw minor inflows, totaling $1.9 million.
