Crypto Investment Products Face $147M Outflows Amid Volatility

• Crypto investment products saw $147M outflows last week, ending a streak of steady inflows.
• Bitcoin led with $159M outflows, while short-bitcoin products gained $2.8M in fresh inflows.
• Multi-asset products saw $29M inflows, marking their 16th consecutive week of growth.

The cryptocurrency investment products experienced a reversal last week, with investors pulling out $147 million after several weeks of inflows. CoinShares’ Digital Asset Fund Flows weekly report, which covers the period from September 29 to October 5, highlights this change in market sentiment.

Digital asset investment products saw minor outflows totalling US$147m last week. #Bitcoin saw outflows of US$159m, while short-bitcoin saw inflows of US$2.8m. Multi-asset investment products (multi-coin) saw inflows of US$29m.

Full report: https://t.co/tPeOssKdMu pic.twitter.com/rdx8WhGyth

— CoinShares (@CoinSharesCo) October 7, 2024

Economic Impact on Crypto

The sudden outflows appeared as the economic data came in stronger than expected, reducing the likelihood of large rate cuts. This economic environment created a volatile market which forced the crypto investors to sit back and watch. Even as the trading volumes in the rest of the crypto market continued to be lackluster, ETP trading volumes rose by 15% to $10 billion in the week.

Canada and Switzerland were the only countries that posted net inflows of $43m and $35m, respectively. The United States was the largest outflow hub with $209 million leaving digital asset products. At the same time, Germany and Hong Kong recorded net outflows of $8.3 million and $7.3 million respectively.

Bitcoin’s Negative Trend

Bitcoin led the negative flows with $159 million in outflows. At the same time, short-bitcoin products become profitable when the price of Bitcoin falls, going against the trend with $2.8 million in inflows. This means that some investors are benefiting even more from Bitcoin’s falling prices. Ethereum recorded $29 million in outflows, indicating weak investor interest.

On the brighter side, multi-asset investment products that involve investing in more than one cryptocurrency received more investment. These products pulled in $29 million last week, which was the 16th straight week of inflows. Since June, multi-asset products have attracted $431 million.

Investors are waiting for signals from the global economy and interest rate policies. The next few weeks will tell if this outflow trend would continue or be reversed.

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