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Crypto fund withdrawals approach $500 million over a nine-week period, according to CoinShares.
According to a report from asset manager CoinShares, outflows from crypto exchange-traded products (ETPs) totaled $455 million over the last nine weeks. Generally, outflows from ETPs reflect a negative outlook toward cryptocurrencies.
Let’s examine the recent trends in digital asset investment products. Here is our #FundFlows with @jbutterfill.
Last week, outflows amounted to US$54m.
Outflows have occurred in 8 of the past 9 weeks, totaling US$455m.
1/4 pic.twitter.com/23TRrTuN3L— CoinShares (@CoinSharesCo) September 18, 2023
Crypto exchange-traded products are intended to mirror cryptocurrency prices. When the shares of these funds drop below their target prices, they liquidate cryptocurrencies, leading to outflows.
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In the week preceding Sept. 18, outflows reached $54 million, concluding a nine-week period during which only one week experienced inflows. Bitcoin (BTC) experienced the largest decline among all exchange-traded products, accounting for 85% of the total outflows from these funds. Last week, ETPs sold over $45 million worth of Bitcoin into the market.
Ether (ETH) funds were also affected by the wave of selling, experiencing outflows of around $5 million last week.
Despite these outflows, several ETPs focused on altcoins performed positively last week. Solana (SOL) ETPs recorded net inflows of $700,000, Cardano (ADA) increased by $430,000, and XRP (XRP) gained $130,000.
CoinShares also shared insights regarding the geographical sources of crypto ETP outflows. The United States accounted for 77% of the outflows, with Germany, Canada, and Sweden also contributing a significant portion.
Crypto ETPs provide a more accessible method for investors with traditional financial accounts to engage in digital assets. However, the approval of a spot Bitcoin exchange-traded fund has encountered various regulatory and legal challenges in the United States. In March, the Securities and Exchange Commission (SEC) rejected VanEck’s proposal for a Bitcoin Trust. On Aug. 11, a U.S. federal appeals court determined that the SEC had acted “arbitrary and capricious” in denying a Bitcoin ETP proposal from Grayscale.
