Crypto-related investment products experienced a downturn after a streak of record inflows, with a total outflow of $942 million reported last week, according to CoinShares‘ latest weekly report.
This marks the first instance of outflows in the past eight weeks, signaling the conclusion of an impressive seven-week inflow totaling $12.3 billion.
Market correction impacts crypto products
The substantial outflows observed coincide with a price correction in the crypto market, with Bitcoin’s price dropping to a multi-week low of $60,976 and other digital assets following suit.
James Butterfill, CoinShares’ research head, explained that this market correction slashed $10 billion from the total assets under management (AuM) for crypto-related investment products. Nevertheless, the current balance of $88 billion stands notably above previous market cycle levels.
Furthermore, the overall trading volume for these investment products declined to $28 billion compared to over $40 billion recorded in the preceding two weeks.
Notably, this negative market performance engendered bearish sentiments among investors, resulting in diminished inflows of just $1.1 billion into the new spot Bitcoin ETFs in the US.
As a result, the modest inflows could not offset the substantial $2 billion outflows recorded from Grayscale‘s Bitcoin Trust (GBTC). Consequently, Bitcoin-related products ended the week with a negative net flow of $904 million.
Ethereum also sustained outflows for the second consecutive week, with $34.2 million exiting the asset. This brings its month-to-date flow to a negative $46.2 million.
Other products, such as Multiassets and Solana, also experienced outflows of $7.3 million and $5.6 million, respectively.
Meanwhile, the negative sentiment reverberated globally, with products in various regions, including the US, Germany, Switzerland, Hong Kong, and Sweden, all witnessing outflows. However, Canada and Brazil experienced minor inflows of $8.4 million and $9 million, respectively.
Interestingly, even short Bitcoin positions experienced an outflow of $3.7 million last week.
On a brighter note, lesser-known cryptocurrencies such as XRP, Polkadot, Avalanche, and Litecoin saw modest inflows, indicating a positive week for these assets amidst the broader market downturn.
