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Crypto Investment Products Experience Second Consecutive Week of Outflows
Over the course of April, crypto-related investment products have encountered their second successive week of outflows, resulting in approximately $206 million exiting the market, as outlined in CoinShares’ most recent weekly report.
Despite the recent halving of Bitcoin, an event that traditionally sparks enthusiasm in the market, investor interest in the primary digital asset has remained subdued, with outflows amounting to $192 million. However, in contrast, short-term investors have taken advantage of the halving event to fortify their positions, injecting $300,000 into the market.
Drivers Behind the Outflows
A recent report by CryptoSlate revealed that Bitcoin exchange-traded funds (ETFs) in the United States experienced five successive days of outflows. Notably, outflows were primarily propelled by Grayscale’s GBTC, ProShares BITO, and Ark 21 Shares’ ARKB.
James Butterfill, CoinShares’ Head of Research, has elucidated that such outflows signal a waning interest among ETP/ETF investors. Speculations surrounding potential delays in rate cuts by the Federal Reserve have contributed to this trend. Additionally, Butterfill highlighted a concurrent decline in trading volumes of ETPs, which amounted to $18 billion last week. He underscored that these volumes now constitute a smaller share of total BTC volumes, marking a shift from 55% a month ago to 28%.
Altcoins Gain Traction
Investors are increasingly directing their attention towards lesser-known altcoins as opposed to major cryptocurrencies like Solana and Ethereum. The report indicates that altcoins such as Chainlink, Polkadot, Litecoin, Cardano, and XRP collectively garnered over $7 million in inflows last week.
Conversely, Ethereum has sustained a downward trajectory, recording the sixth consecutive week of outflows totaling $34 million. Its month-to-date flow remains negative at $85 million, while the year-to-date flow is also in the negative territory, amounting to $11 million.
Solana experienced more modest outflows of $300,000, whereas blockchain equities observed their 11th consecutive week of outflows, reaching $9 million.
Butterfill attributed the outflows from blockchain equities to investor apprehensions regarding the impact of mining halving on mining companies.
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