Ethereum, the second-largest cryptocurrency by market capitalization, has experienced a significant outflow of funds in the past week, reaching a total of $36 million.
This marks the largest single week of outflows since the Merge, an event that took place in September of last year, which brought together Ethereum’s mainnet and the Beacon Chain.
The Coinshares Digital Asset Fund, Flows Weekly Report, revealed that digital asset investment products have been facing continuous outflows for the past eight weeks, with a staggering total of $417 million.
The report suggests that this trend is likely influenced by monetary policy concerns, as there is currently no clear end in sight to interest rate hikes. As a result, cautious investors have been withdrawing their funds from these products.
It is interesting to note that while Ethereum experienced significant outflows, altcoins have seen inflows throughout the year. This stands in stark contrast to Bitcoin and Ethereum, which have both faced consistent outflows.
Altcoins such as Litecoin, XRP, and Solana witnessed minor inflows, indicating a more favorable sentiment toward these alternative cryptocurrencies.
The outflows from digital asset investment products were mainly concentrated on a single provider, with the majority of the funds coming from North America.
On the other hand, Switzerland experienced minor inflows of $9.2 million, while Germany saw outflows of $9.4 million. It highlights the regional disparities in investor behavior and preferences.
Ethereum Holds Steady Amidst Outflows, Outperforms Bitcoin
Bitcoin, the largest cryptocurrency, saw outflows amounting to $52 million during the same week. It adds to the ongoing eight-week run of outflows, which has reached a total of $254 million.
These outflows represent approximately 1.2% of the total assets under management (AuM) in Bitcoin investment products. Furthermore, short-bitcoin products experienced outflows of $1.1 million, accounting for a significant 44% of AuM over the past seven weeks.
Despite Ethereum’s notable outflows, it has fared relatively better than Bitcoin, as the total outflows for Ethereum investment products only account for 0.6% of the AuM. Indicates a somewhat more stable investor sentiment towards Ethereum compared to Bitcoin.
However, the recent surge in outflows from digital asset investment products, particularly Ethereum and Bitcoin, can be attributed to concerns surrounding monetary policy and the ongoing interest rate increases.
While altcoins have seen mixed fortunes, they have overall experienced inflows throughout the year, demonstrating a divergent sentiment compared to the two leading cryptocurrencies.
It remains to be seen how these trends will evolve as market conditions and investor sentiment continue to fluctuate.
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