Crypto Investors Pull Out $417 Million in Two Months
- Crypto investors have shown negative sentiments for eight consecutive weeks, according to Coinshares.
- Despite worries about enforcement actions on assets considered to be securities, the relative resilience displayed by altcoins implies investors have diversified their investments in cryptocurrencies.
The crypto industry is arguably in one of the most difficult periods in its more than a decade of existence. Two of the biggest crypto exchanges, Binance and Coinbase, were recently sued by the US Securities and Exchange Commission (SEC), and the prices of both Bitcoin and Ethereum tanked in reaction to this news.
Interestingly, there’s been increased negative sentiment among institutional investors over the past 8 weeks. According to a recent study by Coinshares, large-scale cryptocurrency investors withdrew $88 million from digital asset funds this week, raising the total over the previous two months to a staggering $417 million.
Head of research at CoinShares, James Butterfill, linked this continuing trend to monetary policy issues, which he said have caused investors to stay cautious as interest rate hikes don’t appear to be slowing down.
Surprisingly, North America accounts for the bulk of the selling pressure recorded this week. The region reportedly accounts for 87% of all outflows. Canadian fund 3iQ led the pack with sales of $76.9 million, increasing their annual sales to $286 million. Furthermore, Swiss funds received $9.2 million in inflows in Europe, while German funds saw around $9.4 million in outflows.
The report recorded $52 million worth of outflows from Bitcoin investment products across the studied time frame. This means that Bitcoin’s eight-week total outflows have reached $254 million, or about 1.2% of all assets under management (AUM). Meanwhile. Ether products had around $36 million in outflows. This figure represents the largest ether outflows recorded since September 2022.
Institutional investors have had mixed experiences with altcoin-based funds. Ripple (XRP), Solana (SOL), and Litecoin (LTC) all had inflows, however, none exceeded $1 million. The largest weekly sell-off was in Polygon-based funds at $400,000.
The digital asset market has demonstrated extraordinary resilience in the face of increased scrutiny and worries about the industry, retaining a market worth more than $1 trillion.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
