Crypto Funds Witness Record Outflows, Breaking 7-Week Inflow Streak

Key Insights:

  • Bitcoin witnessed a significant outflow of $904 million, marking a notable shift in investor sentiment amidst a market correction.
  • Altcoins such as Polygon and Avalanche bucked the trend, attracting a net inflow of $16 million amid the overall outflows from digital asset investment products.
  • While certain regions experienced significant outflows, Brazil continues to demonstrate consistent interest in crypto investments, with 13 consecutive weeks of positive inflows totaling $101 million in 2024.
Crypto Funds Witness Record Outflows, Breaking 7-Week Inflow Streak
Crypto Funds Witness Record Outflows, Breaking 7-Week Inflow Streak

Digital asset investment products have faced a remarkable shift in investor sentiment, with a notable $942 million outflow marking the end of a seven-week streak of inflows totaling $12.3 billion. According to CoinShares, this shift follows a recent price correction that has led to hesitancy among investors.

Analysis From Industry Expert

According to James Butterfield, head of research at CoinShares, the outflows reflect investor hesitancy triggered by a recent price correction. Butterfield notes, “The recent downturn in cryptocurrency prices has prompted the first outflows from funds in nearly two months.” This hesitation led to reduced inflows into new ETF issuers in the US. However, there were still $1.1 billion inflows into new ETF issuers, partially offset by significant outflows from Grayscale, a leading crypto asset manager.

Bitcoin bore the brunt of the outflows, with an exit totaling $904 million. Ethereum, Solana, and Cardano also experienced notable outflows of $34 million, $5.6 million, and $3.7 million, respectively.

Altcoins Grew Despite Outflow Trend

Despite the overall outflow trend, certain altcoins saw positive movements. Polkadot, Avalanche, and Litecoin garnered notable inflows of $5 million, $2.9 million, and $2 million, respectively, offering a silver lining amidst the market turbulence.

Regionally, some areas witnessed substantial outflows, with Sweden, Switzerland, Hong Kong, and Germany recording notable exits. However, Brazil and Canada bucked the trend, attracting inflows totaling $9 million and $8.4 million, respectively.

Brazil, in particular, has demonstrated a consistent trend of inflows, experiencing 13 consecutive weeks of positive inflows totaling $101 million in 2024.

The recent downturn, while significant, hasn’t dampened overall investor interest in crypto funds, with year-to-date flows surpassing $12 billion. Notably, Solana, despite experiencing considerable interest in 2023, has only seen a modest net inflow of $1 million this year, contrasting with Ethereum’s $87 million influx during the same period.

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Glory Kathambi