Investors pull millions out of digital assets in biggest outflow since March
As the market awaits the SEC's decision on a spot-based ETF for Bitcoin in the US, positive sentiment grows thinner and has resulted in huge outflows from digital asset investment products.
- Last week’s outflows represented the largest outflow in the last five months.
- This may be due to waning positive sentiments as SEC stalls on approving a spot-based ETF for Bitcoin.
Last week, digital asset investment products recorded outflows that totaled $168 million. This represented the largest weekly outflow since the US regulatory crackdown on exchanges in March 2023, digital asset investment firm CoinShares found in a new report.
Last week’s $168 million capital flush from crypto funds amounted to a 205% increase from the $55 million in outflows recorded the previous week.
In addition to the aftermath of violent Bitcoin [BTC] sell-offs experienced on 17 August, CoinShares opined that the outflows might be “due to the increasing acceptance that a spot-based ETF for Bitcoin in the US is likely to take longer than many expect, with recent delays being announced by the SEC.”
The digital asset investment firm found further that the month has been marked by low trade volumes.
“This August’s outflows now total US$278m in what has been an exceptionally low trading volume market, with investment products trading US$1.3bn for the week, 16% below the year average,” CoinShares said.
Noting that the negative sentiment was not restricted to the U.S., CoinShares stated that Germany and Canada, which saw inflows in the past few weeks, logged outflows of $68 million and $61 million, respectively, last week.
Bitcoin remains the primary victim
Bitcoin investment products accounted for most of last week’s outflows at $149 million. This represented 87% of all funds removed from the market during the period under review.
With the month so far marked by huge BTC selloffs, the month-to-date outflows from its investment products had reached $251 million, CoinShares found. However, despite this, “on a net basis, flows remain positive for the year at US$265m.”
Continuing its trend of outflows, Short-Bitcoin products experienced a liquidity exit of $4 million last week. This was its 18th week of consecutive funds outflow. And as noted by CoinShares, it represented “89% of total assets under management (AuM).”
Ethereum led the charge
As for altcoins, leading coin Ethereum [ETH], suffered the most outflows. It saw the removal of capital worth $17 million. This was an 88% uptick from the previous week’s $9 million outflow. On a month-to-date, its outflows ranked second after BTC at $30 million.
On the other hand, alts such as Ripple [XRP], Litecoin [LTC], and Solana [SOL] logged minor inflows of $500,000, $440,000, and $100,000 during the same period.
