Key Takeaways
- For the 5th week in a row, exchanges recorded massive outflows from cryptocurrency funds
- Bitcoin (BTC) and Ethereum (ETH) are leading the list
- Solana (SOL) has remained a favorite of investors. SOL recoreded inflows totaling $5.4 million
YEREVAN (CoinChapter.com)- For the fifth week in a row, major cryptocurrencies led by Bitcoin (BTC) and Ethereum (ETH) have seen an increase in the outflow from crypto funds. That coincided with the crypto market undergoing a massive correction.
CoinShares reported $73 million in outflows from digital asset investment products, with the 5-week outflow totaling $532 million. On the other hand, Bitcoin saw weekly outflows to the tune of $55 million, with the outflow of the last five weeks amounting to a whopping $317 million.
The second-largest cryptocurrency by market cap also registered similar results. Ethereum (ETH) saw outflows totaling $30 million last week alone. In the past six weeks, Ether’s outflows reached $230 million.
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“This marks the sharpest outflows since 2018 when viewed proportionally as a percentage of total assets under management (AuM),”
the report, prepared by CoinShares’ investment strategist James Butterfill reads.
However, Ethereum seems to have taken the hardest hit caused by the bearish sentiments in the market. Ethereum’s Assets under management (AUM) amounted to $14.4 billion.
“From a relative perspective Ethereum remains the focus of negative sentiment with outflows representing 1.5% of AuM,”
the report suggested.
Unlike Bitcoin and Ethereum, Solana (SOL) remains an investor favorite. SOL has registered inflows totaling $5.4 million last week and has only seen two weeks of outflows since August 2021.
Recommended: Google to reportedly list Bitcoin (BTC) and crypto on its payment app.
Frank Chaparro sees Fed factor in the Bitcoin outflow numbers
According to Frank Chaparro, News Director at The Block, the markets have broken Bitcoin’s hegemony. BTC would traditionally define the movements in the entire cryptocurrency industry. If the price of Bitcoin went either up or down, all other altcoins would follow suit.
However, the industry has since become multifaceted. One can regularly see prices of Stablecoins, DeFi, and nonfungible tokens (NFT) move contrary to the movements of Bitcoin (BTC). Various cycles are at play in crypto, according to Chaparro.
During the interview with CNBC, Chaparro also suggested that the outflows result from the fears of a potential future rate hike coming from the US Federal Reserve.
With major investors opting to hold on to their assets, the recent outflow might result in a bull market ahead.
“For the first time this year, we saw inflows on Wednesday and Friday, suggesting the bearish sentiment is beginning to abate after recent positive price moves,”
the report claims.
According to Chaparro, as the markets recover, this may have been the busiest period for the crypto market ever.
