CRYPTO — Last week was the second consecutive week that digital asset investment products saw slight withdrawals, with a total of $21 million flowing out of various funds, the vast majority of redemptions occurring with Bitcoin-related products. Trading volumes for digital asset investment products were below normal last week, at $915 million, compared to the 2023 weekly average of $1.5 billion, as reported by CoinShares in their most recent Digital Asset Fund Flows report.
As a result, “this was reflected in the broader Bitcoin market,” according to James Butterfill, head of research at CoinShares, “with a total of US$16bn traded last week on trusted exchanges,” compared to the weekly average of US$52bn so far this year. At the halfway point, digital assets have witnessed inflows of less than US$0.5bn.”93% were from long-Bitcoin investment products,” Butrefill added, explaining where the $21 million went. “Short-Bitcoin saw its 14th consecutive week of outflows totaling $3.1 million.”
This indicates that investors have been cashing out their gains over the past few weeks, despite the asset’s continued positive sentiment. Withdrawals totaled $11 million, with the majority coming from investment products situated in the United States and Canada in North America. Switzerland and Sweden both had outflows of money ($3.2 and $2.6 million), while Germany had inflows of money ($5 million).
Cardano, Solana, and XRP-based products all witnessed a growth in their assets under management while the leading cryptocurrency saw a continuation of investor withdrawals. Cardano saw the largest rise in inflows, at $0.64 million, out of all of these goods, which saw a total inflow of $3 million. There were small outflows of $1.9 million from Ethereum and $0.4 million from Avalanche.
After significant price increases in Bitcoin, investors often sell their coins in order to reinvest in other cryptocurrencies, a phenomenon known as “altcoin season,” which is characterized by a rise in altcoin prices as investors roll over funds from BTC into lower-cap tokens.
Bitcoin is still having trouble gaining traction on Tuesday, and it briefly dropped below $29,000. The altcoin market has also fallen under pressure as a result of yesterday’s hack of Curve Finance and concerns about the legal standing of the recent ruling that XRP is not a security.
The judge presiding over the Securities and Exchange Commission’s (SEC) lawsuit against Terraform labs voiced opposition to the XRP decision, leading some to worry that the decision could be reversed if appealed to the U.S. Courts of Appeal.