As a seasoned market analyst with over two decades of experience under my belt, I’ve seen markets ebb and flow like the tides. The latest CoinShares report indicating $147 million in outflows for cryptocurrency investment products is a reminder that even the most promising trends can take a temporary dip.
Last week, according to a recent CoinShares report, there was a withdrawal of approximately $147 million from cryptocurrency investment products. This marked the end of a three-week streak where these products had seen a net inflow of $2 billion. The underperformance of Bitcoin and other altcoins during this period, contrary to the expectations of a robust start to October 2024, could be the reason behind this trend.
Contrary to expectations, the U.S. jobs report released on Friday was stronger than anticipated. This development has led to a decrease in the likelihood of another 50 basis point interest rate reduction by the Federal Reserve.
In the Monday report, CoinShares Head of Research James Butterfill said:
Last week’s stronger-than-anticipated economic data seems to have diminished the odds of substantial interest rate cuts, which could be the main factor behind the subdued mood among crypto investors like myself.
In summary, international Bitcoin investment funds experienced a total net outflow of approximately $184 million, with short-bitcoin products seeing an inflow of around $2.8 million. However, it’s worth noting that funds based in the US, Germany, and Hong Kong had significant outflows amounting to over $209 million, $8.3 million, and $7.3 million respectively. Conversely, Bitcoin funds in Canada and Switzerland saw positive growth, with inflows of around $43 million and $34.9 million respectively.
Photo: CoinShares
- Despite the lower volumes registered in the broader crypto market, the trading volumes for global crypto investment products surged by 15% to over $10 billion last week. Bitcoin is currently trading at $63,595, reflecting a 2.6% gain in the past 24 hours. Last week, the leading cryptocurrency briefly dropped 8.5% to a low of around $60,000 before rebounding. Despite the recent volatility, Bitcoin is still up 46.6% year-to-date.
Multi-Asset Investment Products See Net Inflows
During the final week of September, Ethereum-related investment products successfully reversed a streak of negative investments and posted a gain. But when October rolled around, the trend shifted yet again, resulting in a weekly withdrawal of approximately $28.9 million.
As a crypto investor, I’ve noticed that diversified investment products, which give access to numerous digital currencies, have bucked the general trend by attracting an additional $29.4 million last week. This is the 16th consecutive week of such inflows, accumulating a total of $431 million. James Butterfill, Head of Research at CoinShares, stated:
For several months now, or since June, there has been a strong preference among investors for multi-asset products. These investors tend to favor a collection of various assets instead of investing in individual ones.
Due to this development, about 10% of the total managed assets in international crypto fund firms is now allocated to diverse investment products.
On Monday, Bitcoin and other cryptocurrencies saw significant improvement in value, buoyed by anticipation for the upcoming US Consumer Price Index (CPI) data this week. This development brings a sense of relief and analysts predict that Bitcoin’s price could reach unprecedented new highs before the end of the month.
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2024-10-07 15:51