Crypto-funds see first outflows in 11 weeks as Bitcoin, Ethereum…

• Digital assets recorded outflows last week for the first time in almost three months.
• This was due to a surge in profit-taking activity.

Capital flight from investment products totaled $16 million last week, marking a potential shift in sentiment after a period of sustained bullishness, digital asset investment firm CoinShares found in a new report.

A wave of investor pullback swept through the digital asset market during the period under review, washing away 11 weeks of steady inflows. 

According to the investment firm, weekly trading volume rallied above the year-to-date average despite the outflows recorded.

CoinShares noted,

“Trading activity remained well above the year average, though, totaling US$3.6bn for the week, compared to the year-to-date average of US$1.6bn.”

On a regional level, most of last week’s liquidity exit from crypto funds came from the US and Germany, with outflows of $18 million and $10 million, respectively. 

Canada and Switzerland, on the other hand, both recorded minor inflows of $7 million and $9.1 million, respectively.

This led CoinShares to opine:

“The mixed regional flows suggest this was more related to profit-taking rather than a turn in sentiment towards the asset class.”

Bitcoin got hit the hardest

During the week under review, investment products backed by leading crypto Bitcoin [BTC] recorded outflows of $33 million.

The significant inflow into BTC-backed products in the past two months pushed the coin’s year-to-date (YTD) above $1.5 billion. Tethering closer to $2 billion, it totaled $1.67 billion despite last week’s fund removal. 

On a month-to-date basis, the report showed that BTC recorded a net positive fund flow of $7 million.

Within the week considered, BTC’s asset under management (AUM) totaled $36 billion, enjoying a 72% share of the entire market’s total AUM of $50 billion. 

As for short-Bitcoin products, they recorded minor outflows of $300,000.

Ethereum failed, whereas other alts excelled

Within the altcoin ecosystem, leading altcoin Ethereum [ETH], recorded the most amount of outflows. The second-largest cryptocurrency by market capitalization saw outflows of $4.4 million during the period considered. 

This followed a six-week period of consecutive fund flows into ETH-backed assets, which amounted to $19 million. On a YTD, the coin’s outflows were $129.4 million. 

Regarding other alts:

“Altcoins bucked the trend, seeing US$21m of inflows. The main beneficiaries being Solana, Cardano, XRP, and Chainlink, totaling US$10.6m, US$3m, US$2.7m, and US$2m respectively.”