Crypto Asset Investment Products Witness Substantial Outflows
In a notable shift within the cryptocurrency investment landscape, last week saw a significant exodus from crypto asset investment products. As highlighted in the CoinShares fund flows report, these outflows amounted to a staggering $508 million, culminating in a two-week total of $924 million in outflows. Until recently, the market had enjoyed an 18-week streak of inflows, amassing a substantial $29 billion. This change in direction is largely attributed to investor caution in light of ongoing macroeconomic uncertainties.
Altcoins Defy the Trend with XRP Leading the Charge
Despite the overarching trend of outflows, altcoins have managed to capture continued investor interest. Notably, XRP emerged as a standout, attracting inflows of $38.3 million, and maintaining a robust trajectory since mid-November. According to CoinShares, XRP has now accumulated $819 million in total inflows, fueled by investor optimism over the potential favorable resolution of the US Securities and Exchange Commission (SEC)’s lawsuit against the cryptocurrency.
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Other altcoins have also demonstrated resilience. Solana, Ethereum, and Sui attracted inflows of $8.9 million, $3.7 million, and $1.47 million, respectively. Conversely, Bitcoin experienced significant outflows, with $571 million being withdrawn from Bitcoin-centric investment products. Interestingly, some investors have increased their exposure to short-Bitcoin positions, which saw inflows of $2.8 million. This divergence in sentiment between Bitcoin and select altcoins underscores the complex dynamics at play within the crypto investment arena.
Price Performance of Leading Cryptocurrencies
While altcoins have managed to counteract the trend of outflows that affected Bitcoin, their price performance tells a different story. Over recent weeks, not only has Bitcoin faced a bearish trend, but other altcoins have also experienced declines. On the two-hour chart, BTC’s price remains relatively stable, yet it dropped by 0.8% in the past week. Ethereum, XRP, and Solana have seen steeper declines, plunging by 3.2%, 7.6%, and 14.3%, respectively, within the same timeframe. These decreases have led to the breach of several key support levels.
At the time of this report, Bitcoin is trading at $95,567, reflecting a 0.5% decrease over the past day. Ethereum is priced at $2,674, marking a 4.9% drop in the last 24 hours. Meanwhile, XRP is trading at $2.48, showing a 3.5% decline, Solana is at $158 with a 6.8% drop, and Sui is valued at $3.17, experiencing a 6% decrease in the same period.
Regional Trends and Underlying Causes of Fund Outflows
James Butterfill, Head of Research at CoinShares, provided insights into the recent outflows, noting that, “Investors are exercising caution following the US Presidential inauguration, amid uncertainties surrounding trade tariffs, inflation, and monetary policy.” Furthermore, there has been a noticeable decline in trading turnover, decreasing from $22 billion two weeks ago to $13 billion last week. This shift reflects a more cautious market sentiment, particularly in the United States, where outflows were most pronounced.
The US experienced $560 million in outflows, contrasting sharply with Europe, which continued to see healthy inflows. Germany contributed $30.5 million, while Switzerland added $15.8 million, indicating a more optimistic sentiment within these regions.
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