Leading European cryptocurrency asset management CoinShares recently published a study that showed the biggest outflow of money from exchange-traded products based on cryptocurrencies. However, despite a sharp decline, several large-cap stocks were able to draw in investor capital.
Crypto funds register largest outflows since March, but XRP and LTC investors are optimistic
There was a $168 million net outflow of money from digital asset investment products. Since the regulatory crackdown in March 2023 and the bank failures of crypto-friendly institutions, markets have not experienced such fear. These figures were made public by CoinShares today, August 29, 2023, in its most recent Volume 146: Digital Asset Fund Flows Weekly Report.
The biggest losses were experienced by bitcoin-based funds, which are to blame for a $149 million outflow. XRP, Cardano (ADA), Litecoin (LTC), and Solana (SOL)-based funds also had a funding inflow at the same moment.
The most successful cryptocurrency-based products were XRP, which saw a $500,000 capital influx. This parameter swings between $100,000 and $400,000 for the remaining cryptocurrencies. Ethereum (ETH) and Binance Coin (BNB), two dominant altcoins, both saw a money outflow.
Analysts noted that investors are simultaneously selling equities linked to short bets in Bitcoin (BTC):
With $4 million in withdrawals during the past week and $89% of total AUM lost in the previous 18 weeks, many investors are still selling their short positions.
As a result, cryptocurrency-based funds had a substantial $277.6 million in withdrawals during a very unpleasant August 2023. The study claims that, after several months, crypto-based funds have allotted $32 billion in AUM.
All eyes on Bitcoin ETFs
Investor pessimism, in the opinion of analysts at CoinShares, should be linked to postponed decisions about the approval of a spot Bitcoin (BTC) ETF in the US:
This unfavourable attitude, in our opinion, is brought on by the growing understanding that, given recent SEC delays reported, a spot-based ETF for Bitcoin in the US is likely to take longer than many anticipate.
This market’s trading volume also fell precipitously; in August, it was 16% lower than it was a year earlier. The two nations having the biggest outflows of investor money are Germany and Canada.
The status of the Bitcoin (BTC) spot ETF in the United States is still unknown, as previously reported by U.Today. The SEC is advancing due dates for the majority of requests that have previously been fulfilled.
The next surge in digital assets will undoubtedly be started by the likely approval of a Bitcoin Spot ETF, according to cryptocurrency bulls.
