Investors Withdrew $453 Million From Bitcoin
- On June 17, CoinShares claimed that the outflows “were virtually exclusively from Canadian exchanges” and “one specific supplier,” however due to delays in reporting trade data, these claims were reflected in last week’s results.
- Total digital assets under control, as measured by CoinShares, are at their lowest level since February 2021, down around 59% from their high in November 2021, and now stand at US$46 billion.
- After the first short Bitcoin-linked ETF was introduced by U.S. fund issuer ProShares last week, funds shorting BTC raised their stakes by around $15 million.
The data indicates that investors are becoming more cautious about investing in digital assets, as the overall market value of cryptocurrencies has fallen sharply in recent weeks. The total market value of all cryptocurrencies was around US$2 trillion at the beginning of 2022 but has since dropped.
Investors have been spooked by a number of factors, including a crackdown on cryptocurrency exchanges in China and concerns about the environmental impact of Bitcoin mining. Additionally, Tesla CEO Elon Musk announced that his company would no longer accept Bitcoin as payment for its cars, due to concerns about the energy usage of Bitcoin mining.
As the market continues to fluctuate, it remains to be seen whether investors will remain committed to digital assets or begin withdrawing their funds en masse. However, if the outflows from last week are any indication, it seems that many investors are becoming increasingly wary about investing in cryptocurrencies.
A spokesperson for CoinShares said that the decline in AUM was due to a variety of factors, including profit-taking after the recent rally and uncertainty about impending regulations.
Similarly, digital asset manager Grayscale Investments also saw outflows last week, with $132 million worth of Bitcoin and other digital assets redeemed by investors.
Analysts say that the renewed interest in Bitcoin from institutional investors is driven by a desire to hedge against inflationary pressure on traditional assets such as stocks and bonds.
It is not clear which exchanges or providers were responsible for the $453 million outflows, but CoinShares noted that the majority of trading activity last week came from Canadian exchanges. The outflows may have been due to a combination of factors, including regulatory uncertainty and concerns about the security of Canadian exchanges.