Crypto Investment Products Experience $126 Million Weekly Outflows: CoinShares Report

Last week, the cryptocurrency investment landscape showed signs of cooling, with minor outflows of $126 million from related investment products. This modest yet notable capital withdrawal reflects growing caution among investors in a volatile market amid the Bitcoin halving.

According to Coinshares’ report, although trading volumes slightly rebounded to $21 billion, activity in Exchange-Traded Funds (ETFs) decreased from 40% to 31% of the total volume across various exchanges. This decline in institutional investment vehicle inflows signals prevailing caution among major market investors.

Major Crypto Fund Outflows Traced to U.S.

Geographically, the United States led the outflows with $145 million, followed by Switzerland with $5.7 million and Canada with $6 million. Conversely, German investors saw an opportunity in the price drop and made inflows of $29 million.

Despite widespread caution, Bitcoin managed to maintain a positive investment flow balance for the month. While it recorded outflows of $110 million last week, the market’s leading crypto asset accumulated net inflows of $555 million since early April. This indicates that, for the monthly aggregate, more investors have bet on increasing their BTC holdings than those who have decided to liquidate their positions.

However, Coinshares noted that the same did not happen with Ethereum, the second-largest cryptocurrency by market capitalization. Ethereum’s native token extended its negative streak to five consecutive weeks of capital outflows, totalling $29 million in withdrawals. This persistent outflow suggests a clear bearish sentiment among ether holders, with more participants offloading their positions.

Investor Appetite Shifts to Speculative Altcoins

Despite the weakness shown by Bitcoin and Ethereum, many investors decided to bet on other more speculative and niche altcoins such as Decentraland ($4.9 million), Basic Attention Token ($2.9 million), and LIDO ($1.8 million), which capitalized on fresh capital exiting dominant coins, revealing an appetite for risk and the pursuit of higher returns by more aggressive investors.

At the time of writing this note, the Bitcoin ETFs approved in January by the U.S. Securities and Exchange Commission (including BlackRock’s GBTC) have experienced a total trading volume of $1.76 billion and have a total market capitalization of $54.08 billion, according to Coinglass data.

Bitcoin currently trades at $64,945 after experiencing a slight rebound from the daily low of $62,773 reached on April 14. This decline in Bitcoin’s price occurred due to geopolitical tensions. As a result, investors sought less volatile assets, such as gold, causing a downturn in the cryptocurrency market.