Markets
Investors withdraw $584 million from the crypto market
The crypto market is undergoing a significant correction as investors withdrew $584 million from crypto-related investment products last week, according to the latest report from CoinShares. report.
Additionally, global trading volumes for crypto ETPs have reached their lowest levels since the U.S. Securities and Exchange Commission approved the launch of several spot securities. Bitcoin exchange-traded funds (ETFs) in January, totaling just $6.9 billion for the week.
The drop continues a trend from the previous week, where investors withdrew about $600 million, bringing the two-week total to nearly $1.2 billion in outflows.
James Butterfill, Head of Research at CoinShares, commented:
“We believe this is a reaction to investor pessimism regarding the prospect of the FED cutting interest rates this year.”
Bitcoin and the United States lead the exits
Bitcoin investment products saw the largest outflows, totaling $630 million. Bitcoin ETPs had six consecutive days of outings in the United States, primarily from the Grayscale Bitcoin ETF and Fidelity’s FBTC.
Canada also saw substantial outflows from crypto ETPs, with $109 million withdrawn. This was followed by Germany and Hong Kong, which saw capital outflows of $24 million and $19 million, respectively.
Crypto ETP flow by country (Source: CoinShares)
Conversely, Switzerland and Brazil saw inflows of $39 million and $48.5 million, respectively, helping to offset overall outflows.
Investors with bearish sentiments also withdrew around $1.2 million from short Bitcoin products.
In the meantime, Ethereum joined the outflow trend, making its first withdrawals in weeks, totaling around $58 million. This reduced its monthly flow to around $23 million from $82 million.
Altcoins prove attractive
Despite major digital capital outflows, multi-asset investment products and some altcoins saw significant inflows.
According to CoinShares, multi-asset products attracted more than $98 million, while SolanaLitecoin and Polygon received $2.7 million, $1.3 million, and $1 million, respectively.
Butterfill explained that these inflows indicate that new investors are focusing on altcoins. He stated:
“[These inflows] suggest that investors are viewing altcoin market weakness as a buying opportunity.