Crypto investment products in trouble? $305 mln outflows raise alarm

  • Crypto investment products saw $305M outflows, with Bitcoin and Ethereum ETFs showing mixed trends.
  • Bitcoin gains post-ETF launch; Ethereum struggles to reach expected price levels.

The previous two jokes have been a pervasive negative trend across multiple regions and providers, with Bitcoin and Ethereum ETFs exhibiting mixed gains during the same period.


Amidst a general market upswing, with the global crypto market cap rising by 2.79% over the past 24 hours and most coins gaining over 2%, concerns loomed as weekly charts reveal declines exceeded 5%.

Crypto investment products in danger

Of greater concern is the significant outflow from cryptocurrency investment products, with a recent CoinShares report highlighting a total of $305 million in outflows during the in-between the 24th to the 31st of August.

This reversal comes after net inflows of $543 million the previous week, impacting major asset managers like Ark Invest, Bitwise, BlackRock, Fidelity, Grayscale, ProShares, and 21Shares. 

Crypto investment products in trouble? $305 mln outflows raise alarm

As per the report, 

As an analyst, I’ve observed a notable shift in the prevailing attitude towards Bitcoin: there were significant withdrawals to the tune of US$319 million, indicating a predominantly bearish outlook. Conversely, short bitcoin investment vehicles experienced inflows of approximately $4.4m for the second consecutive week, indicating some optimism among investors in these specific products.

The analysis further added, 

“During the value was withdrawn outflow of approximately five million dollars and arose from Ethereum saw a decrease in Ethereum, as trading activity on the other hand, hit merely 15% the levels just 15% compared to the peak during the US ETF US ETF launch week. “

Execs weigh in

Commenting on this unexpected streak of outflows, CoinShares’ Head of Research, James Butterfill, noted,

“We continue to expect the asset class to become increasingly sensitive to interest rate expectations as the Fed gets closer to a pivot.”

Butterfill clarified that the outflows were set off by a widespread pessimistic atmosphere prevalent in various areas and service providers, characterized by a prevailing optimism.

The robust U.S. economic data unexpectedly, increased the likelihood of a smaller-than-anticipated interest rate decrease.

The disparity between the two ETFs

Indeed, the latest data from Farside Investors like Farside Capital Management indicates a negative sentiment is showing up in the Bitcoin ETF market for the Bitcoin ETF [BTC] ETF, the Bitcoin E saw bearish red-flows, which suggests a downtrend trend in the Bitcoin ETF[ETF], as reflected over the last week of August 30. In simple terms.

Crypto investment products in trouble? $305 mln outflows raise alarm

Conversely, Ethereum [ETH] ETFs have exhibited greater stability.

Despite experiencing outflows of $12.6 million during the same period, ETH ETFs are showing indications of a potential rebound.  

However, it still struggles to compete with Bitcoin ETFs.

According to Galaxy Research’s recent findings, the lower trading activity in Ethereum ETFs as compared to Bitcoin ETFs can primarily be attributed to the absence of margin trading facilities, making them less enticing for institutional investors.

Crypto investment products in trouble? $305 mln outflows raise alarm

Impact on prices

On the price front, both BTC and ETH have been on an upward trajectory, with green candlesticks appearing on the daily chart.

In the past 24 hours, Bitcoin saw a rise of 2.22%, while Ethereum increased by 2.67%.

Despite these gains, BTC and ETH were trading at $59K and $2.5K, respectively—below expectations following the ETF launch.

It’s important to note that after the ETF launch, Bitcoin initially surged past $70K in March, reflecting a strong trend.

However, Ethereum has struggled to break the $3K mark, falling short of the anticipated $4K level. 

Read More

2024-09-03 15:04