During a chaotic week for cryptocurrency investment, the most recent CoinShares Digital Asset Fund Flows Weekly Report showed a big drop. Outflows continued for the third week in a row, with an astonishing $435 million moving out of the market. This is the biggest decline since March.
The trading volumes of Exchange Traded Products (ETPs) followed this fall; they went down to $11.8 billion from last week’s $18 billion, while Bitcoin prices went 6% lower, showing that people are even more worried about this market. These outflows took place mostly in the United States, which saw an enormous $388 million leave, but there is still some hope left in all this darkness – year to date US inflows are record high at $13.6 billion.
Grayscale’s Downturn and New Issuer Slowdown in Crypto Sector
Delving into the specifics, the venerable Grayscale bore the brunt of the exodus, hemorrhaging $440 million in outflows, marking its lowest point in nine weeks. Yet, as Grayscale’s outflows gradually decelerate, a concerning trend emerges a simultaneous slowdown in inflows from new issuers. Last week, these newcomers only attracted $126 million, a stark decline from the previous week’s $254 million.
This negative sentiment extended beyond the US borders, with Germany and Canada experiencing outflows of $16 million and $32 million, respectively. However, Switzerland and Brazil defied the prevailing trend, attracting $5 million and $4 million in inflows, respectively.
The primary assets that capital flowed out of were Bitcoin and Ethereum, which had $423 million and $38 million of their money taken out, respectively. Conversely, many different types of altcoins had money put into them as investment products that could be used, with multiple coins gaining $7 million in inflows. In addition to this, investments continued being made into established cryptocurrencies such as Solana, Litecoin, and Chainlink, each having received $4 million, $3 million, and $2.8 million worth of investment, respectively.
With these turbulent times for digital assets occurring it is important for investors and market analysts alike to stay watchful so they are able to identify any signs that may indicate a change in the market. What should not be overlooked however is how certain altcoins’ ability to withstand the wider slump suggests that there is more than one way to think about investing in this space – signifying an ever-changing digital asset ecosystem.
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