Institutional Crypto Investors Pulling Out of Market as Bitcoin Sees Highest Weekly Outflow Since March
Effects Of A Lingering Bear Market?
The summer season has brought with it a dragging bear market for cryptocurrencies, and this has led to institutional investors rapidly pulling out of the market. Bitcoin, being the dominant cryptocurrency, has been the center of attention, witnessing the highest weekly outflow since March.
Weekly trading volumes in investment products have experienced a significant decline, falling 36% below the year-to-date average. The on-exchange market volumes have suffered even more, plummeting 62% relative to the year-to-date average.
Last week, the majority of the outflows (93%) were from long Bitcoin investment products. In contrast, short Bitcoin investment products experienced their 14th consecutive week of outflows, totaling $3.1 million. Bitcoin saw outflows amounting to $111 million, the largest since March when the United States Securities and Exchange Commission (SEC) initiated regulatory investigations into cryptocurrency exchanges. Ethereum also suffered outflows amounting to $6 million. In total, the outflows from both Ethereum (ETH) and Bitcoin (BTC) reached $117 million last week.
BTC recovers after dipping below $29,000 | Source: BTCUSD on Tradingview.com
Even altcoins have not escaped the market downturn. There were significant outflows from two Exchange-Traded Product (ETP) providers in Germany and Canada, amounting to $71 million and $29 million, respectively. Additionally, Uniswap and Cardano saw outflows of $0.8 million and $0.3 million, respectively.
However, there are some promising signs for altcoins. Altcoin sentiments seem to be improving, which has helped cushion the outflows in Ethereum and Bitcoin. Solana recorded the largest inflows, amounting to $9.5 million, marking the biggest single week of inflows since March last year. XRP and Litecoin also saw inflows, with $0.5 million and $0.46 million, respectively.
A Comparative Outlook With Last Week’s Performance
The performance of digital asset investment products this week has witnessed some notable milestones. For the first time in 14 weeks, outflows from Bitcoin shorts have ceased. However, compared to the weekly average of $1.5 billion recorded so far this year, last week’s trading volumes for digital asset products were significantly low at $915 million.
In terms of regional performance, negative sentiments were primarily focused on North America, where outflows of $11 billion were observed from both Canada and the United States. Germany, on the other hand, recorded inflows of $5 million, while Switzerland and Sweden experienced outflows totaling $3.2 million and $2.6 million, respectively.
