Cryptocurrency Investment Products Experience $305 Million in Outflows Amid Strong U.S. Economic Data
In the past week, cryptocurrency investment products experienced an outflow exceeding $305 million, a trend largely attributed to unexpectedly robust economic data from the United States, which has curtailed expectations for a potential 50-basis point interest rate reduction. According to the latest Digital Asset Fund Flows report from CoinShares, there is a prevailing negative sentiment amongst various market participants across different regions.
Specifically, Bitcoin-centric investment offerings faced outflows totaling approximately $319 million, while those that adopted a short position on Bitcoin reported inflows of $4.4 million, marking the highest inflow since March. Additionally, investment products centered around Ethereum, the second-largest cryptocurrency by market capitalization, experienced a decline of $5.7 million, correlated with a notable stagnation in trading volumes, which are currently only 15% of those observed at the time of the launch of spot Ether exchange-traded funds (ETFs) in the United States.
Despite the challenging environment, altcoins have demonstrated resilience, with various digital currency products recording inflows totaling $6.4 million. Solana emerged as the leader within the altcoin segment, attracting inflows of $7.6 million. Furthermore, specific products focused on Binance’s BNB, Litecoin, and Cardano reported inflows ranging from $300,000 to $800,000.
This outflow period occurs against the backdrop of a significant market downturn for cryptocurrencies, with Bitcoin experiencing an over 8.5% decline in value over the past week and trading at $58,000, down from a peak of $64,000 at the end of the previous month. It is noteworthy that Bitcoin’s all-time high, reached earlier this year, surpassed $73,000. Overall, the cryptocurrency market capitalization has diminished to approximately $2.04 trillion, a substantial decrease from nearly $3 trillion at its peak.
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