Key Points
- Largest outflow since March
- BTC and SOL stand out in losses
- ETH sees inflows despite market correction
- Trading volume significantly reduced
Cryptocurrency investment funds have faced their largest weekly outflow since March, with investors pulling over $600 million from these products amid a broader market correction. This major shift, reported by CoinShares in their Digital Asset Fund Flows report, highlights a significant change in investor sentiment as the crypto market experiences turbulence.
Bitcoin and Solana Hit Hard by Outflows
The report indicates that the week ending June 14 saw a net $600 million leave cryptocurrency investment products, reversing a five-week period of inflows totaling $4.35 billion.
The outflows are largely attributed to a decline in Bitcoin prices and a hawkish stance from the Federal Open Market Committee (FOMC), which opted to maintain the current interest rate of 5.25%-5.50% during their June 11-12 meeting.
Bitcoin funds were hit the hardest, losing approximately $621 million. This was primarily concentrated in spot Bitcoin exchange-traded funds (ETFs), which experienced outflows every day of the week, except for a single inflow of $100.8 million on June 12. The substantial outflows reflect a growing bearish sentiment among investors.
Solana, a prominent Ethereum competitor, also saw significant outflows from its investment products. While Solana experienced $200,000 in outflows last week, it has had $36 million in inflows year-to-date. In comparison, Ethereum saw $94 million, and Bitcoin a massive $16.1 billion.
Crypto Investment Funds Face Largest Weekly Outflow Since March Amid Market Correction With BTC, SOL and XRP STanding Outhttps://t.co/dynawYEcLQ
— John Morgan (@johnmorganFL) June 19, 2024
Ethereum and Short Bitcoin Products See Inflows
Despite the overall market correction, products offering exposure to Ethereum (ETH) saw $13 million in inflows. This positive movement is likely driven by anticipation of the expected launch of spot Ethereum ETFs later this year, which has bolstered investor confidence in ETH.
Additionally, investment products that short Bitcoin, benefiting from decreases in Bitcoin prices, recorded inflows of $1.8 million. This trend underscores the bearish outlook among certain segments of the market, with investors looking to profit from potential declines in Bitcoin’s value.
Broader Market Trends and Altcoin Movements
Multi-asset investment products, which provide exposure to a range of digital assets, saw modest outflows of $1.1 million. Trading volumes remained subdued throughout the week, averaging around $11 billion, significantly lower than the $22 billion weekly average for 2024. The combination of outflows and reduced trading activity led to a decrease in total assets under management (AUM) from over $100 billion to $94 billion.
Despite the general outflows, various altcoins experienced smaller inflows. BNB saw $0.3 million, Litecoin $0.8 million, XRP $1.1 million, Chainlink $0.7 million, and Cardano $0.8 million. These inflows, though modest, indicate selective investor interest in specific altcoins amid the broader market downturn.
