Shockwaves in Crypto Markets: Digital Asset Outflows Conceal a Trading Frenzy of $11.8 Billion

Shockwaves in Crypto Markets: Digital Asset Outflows Conceal a Trading Frenzy of $11.8 Billion
Table of Contents

In the last week, according to the official CoinShares report, digital asset investment products experienced fund outflows totaling US$21 million, despite the fact that this global number does not reflect the intense commercial activity that reached US$11.8 billion.

In this scenario, Bitcoin stood out with a trading volume that was seven times higher than the weekly average in 2023, reaching an impressive figure of US$11.8 billion.

In the US market, net inflows totaling US$263 million were seen, while Canada and Europe combined outflows of US$297 million.

This phenomenon suggests a possible migration of assets to the United States, where rates are currently more competitive.

Despite the outflows of funds in the general digital asset market, cryptocurrencies were not the only ones affected.

Altcoins such as Ethereum and Solana experienced outflows of US$14 million and US$8.5 million, respectively.

Bitcoin, on the other hand, saw minor outflows of US$25 million, although trading volume of US$11.8 billion represented 63% of all Bitcoin transactions on trusted exchanges.

Exchange-traded products (ETP) activity is dominating digital assets

In the exchange-traded fund (ETF) space, the highest-cost incumbent issuers in the United States suffered outflows totaling US$2.9 billion.

However, newly issued ETFs, based on market prices and launched on January 11, 2024, have experienced substantial inflows totaling US$4.13 billion, outpacing outflows from higher-cost incumbent ETPs.

The recent price weakness has been perceived by some investors as an opportunity to increase investments in short Bitcoin investment products, generating fund inflows of US$13 million.

Finally, blockchain-related stocks continued to attract strong investment, with significant inflows totaling US$156 million in the past week.

This momentum brings a total of $767 million over the last nine one-week periods for digital assets, underscoring sustained interest in stocks linked to blockchain technology.

Despite moderate outflows in digital asset investment products, the market shows changing dynamics.

Preference for competitive fees drives asset migration to the United States, while ETP activity dominates Bitcoin trading.

The preference for new ETFs over higher-cost incumbents signals a transformation in the market landscape, while investments in blockchain equities remain robust.

This continued momentum suggests that, regardless of fluctuations in cryptocurrency prices, investors remain confident in the long-term potential of the underlying technology.


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