Investor sentiment dips as Bitcoin products witness first outflows in a month

On Jul 25, 2023

For the first time in the last four weeks, investment products suffered outflows.
Investors shied away from Bitcoin, with altcoins pulling all the inflows.

For the first time in the last month, digital asset investment products experienced outflows that totaled $6.5 million, ending four weeks of cumulative $742 million inflows, CoinShares found in a new report.

According to the digital assets investment firm, last week trading volumes of $1.2 billion for investment products were lower than the average weekly volume for the year. This represented a 39% decline from the previous week’s volume of $2.4 billion.

The outflows recorded last week and the accompanying decrease in trading volumes signaled a negative shift in investor behavior and sentiment toward this asset class. The drop in trading volumes specifically indicated a temporary slowdown in market activity or a cautious approach from investors due to various factors that may influence the market dynamics.

Source: CoinShares

Bitcoin: A tale of how the mighty coin fell

After several weeks of being investors’ most preferred investment asset, Bitcoin [BTC] suffered outflows that totaled $13 million last week.

Last week’s BTC outflows beset the market following several weeks of inflows due to investors’ positive sentiments caused by the influx of exchange-traded fund (ETF) applications in June.

BlackRock applied for a coveted spot in the BTC exchange-traded fund (ETF) on 15 June. This action triggered a flurry of competitors to follow suit and renew their own ETF applications.

Consequently, investors responded enthusiastically, leading to a rapid flow of funds into BTC-focused investment funds throughout the following month. Notably, this surge in investments marked the fastest pace seen since October 2021.

Not faring any better, Short-Bitcoin investment products recorded their 13th week of consecutive outflows. According to CoinShares:

“Short bitcoin total assets under management (AuM) at its peak represented 1.3% of total bitcoin investment products. This has now fallen to just 0.4%, the lowest level since June 2022.”

Source: CoinShares

Altcoins are last week’s winners

Negative investors’ sentiments have mostly trailed leading altcoin Ethereum [ETH], since the year began. However, while BTC and Short-BTC suffered liquidity exit:

“Ethereum topped the leaderboard last week, seeing US$6.6m inflows, suggesting sentiment, which has been poor this year, is slowly beginning to turn around,” CoinShares found.

Further, Ripple’s “controversial” token XRP recorded inflows of $2.6 million, bringing its 11 weeks of inflows to $6.8 million or 8% of all assets under management inflows. According to the report, “this implies investors are increasingly confident in the outlook for XRP.”

Other alts, including Solana [SOL], Uniswap [UNI], and Polygon [MATIC], registered minor inflows of $1.1 million, $700,000, and $700,000, respectively.

This article originally appeared here.

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