Investment Funds Shed Millions in Crypto for the Fifth Week as $LTC and $XRP Draw Attention
This week was the fifth straight week of withdrawals by institutional investors, bringing the total amount of money taken out of crypto investment products to $232 million. Total assets under management have decreased by 0.7% as a result of the outflow.
The volume of crypto investment product transactions was $900 million for the last week, a dramatic 40% decrease from the yearly average, as reported by CoinShares in their most recent Digital Asset Fund Flows report. Similarly, trading volumes across reliable exchanges in the wider market hit a fresh low of $20 billion for the week, the lowest level seen since late 2020.
According to research by CoinShares, the leading cryptocurrency, Bitcoin, was at the centre of negative sentiment and saw $33 million in withdrawals, a pattern that has persisted for the previous five weeks.
Surprisingly, $1.3 million left the Short-bitcoin investing strategy, which profits when bitcoin’s price drops. There was a total outflow of $235 million from these two categories of financial products during the last five weeks.
Analysts continue to speculate on what is driving the current pessimism about long and short investment products. Some analysts blame this development on persistent regulatory worries and market volatility, while others point to the impact of macroeconomic variables.
Interestingly, altcoins (cryptocurrencies other than Bitcoin) have defied the trend throughout this slump, with Bitcoin being the only exception. The second most valuable cryptocurrency, Ethereum, had a withdrawal of $1 million. Avalanche and Litecoin, on the other hand, saw investments of $700.000 and $300.000, respectively, in comparison to the rest of the altcoin market.
For the second week in a row, investors pulled out a modest $2 million from blockchain equity ETFs, which follow a basket of equities from firms using blockchain technology.
According to CryptoGlobe, Bloomberg Intelligence’s senior macro analyst Mike McGlone recently said that he believes a substantial Bitcoin collapse is possible, with the price falling down to $7,000.
At the same time, Tether, the company behind the most popular stablecoin USDC, has decided to put a large chunk of its operating revenues into Bitcoin.
Tether has said that it would begin routinely investing up to fifteen percent of its net realised operational earnings towards the purchase of Bitcoin (BTC).
Also Read: A worldwide securities regulator has called for crypto to be treated the same as fiat currency
