Points
- Global crypto investment products saw net outflows of $528 million last week.
- Fears of a U.S. recession and geopolitical concerns are driving the sell-off.
- Bitcoin accounted for $400 million of the outflows.
- Ethereum investment products saw $146 million in outflows.
- The outflows are impacting both crypto-related equities and traditional tech ETFs.
Global crypto investment products at asset managers such as Ark Invest, Bitwise, BlackRock, Fidelity, Grayscale, ProShares, and 21Shares registered net outflows for the first time in a month last week, totaling $528 million, according to CoinShares’ latest report.
Drivers of Outflows: Economic and Geopolitical Concerns
The outflows were “a reaction to fears of a recession in the US, geopolitical concerns, and consequent broader market liquidations across most asset classes,” CoinShares Head of Research James Butterfill said. “The price correction from Friday’s close saw $10 billion wiped off total ETP AUM.”
Bitcoin Dominates Outflows
Bitcoin-based products dominated, accounting for $400 million of the net outflows following five consecutive weeks of net inflows. Short Bitcoin funds also saw the first significant net inflows since June, adding $1.8 million.
The U.S. spot Bitcoin exchange-traded products represented just $80.6 million of the global outflow total, driven by $237.4 million worth of net outflows on Friday, which surpassed net inflows earlier in the week.
Ethereum Investment Products Affected
Ethereum investment products witnessed net outflows of $146 million last week globally, dominated by $169.4 million in net outflows from U.S. spot Ethereum ETFs. However, this figure masks the $433.6 million of net inflows into the new Ethereum ETFs, overwhelmed by $603 million in net outflows from Grayscale’s converted and higher-fee fund, ETHE. Total net outflows since the funds began trading last month now exceed $500 million.
Regional Variations in Outflows
Regionally, U.S.-based funds saw the most net outflows, losing $531 million globally. Hong Kong and Germany-based crypto investment products also saw net outflows of $27 million and $12 million, respectively. However, the price weakness was seen as an opportunity to add to digital asset products in Switzerland and Canada, Butterfill said, with those markets seeing net inflows of $28 million and $17 million.
Broader Market Implications
Crypto-related equities also continued to see outflows last week, with $18 million pulled, in line with outflows from broad tech-related ETFs, Butterfill added.
Conclusion: Navigating Market Volatility
Last week’s price declines in the crypto market were exacerbated over the weekend before falling dramatically on Monday morning — with Bitcoin plummeting below $50,000 at one point — while Ether lost all its year-to-date gains as its price dropped below $2,200.
Bitcoin is currently trading for $51,723, according to The Block’s Bitcoin Price Page, down 15% over the past 24 hours and 25% this last week. Ether is changing hands for $2,279 per The Block’s Ether Price Page, down 22% in the last 24 hours and 32% over the last seven days. Meanwhile, the GMCI 30, which represents a selection of the top 30 cryptocurrencies, has fallen 18% over the last 24 hours to 95.96, losing 28% over the past week.
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Conclusion: Navigating Market Volatility （cont.）
The recent sell-off in crypto investment products underscores the broader market volatility and the impact of macroeconomic factors on the digital asset space. Investors are reacting to fears of a U.S. recession, geopolitical tensions, and broader market liquidations, leading to significant outflows from both crypto and traditional financial products.
解説
- Net Outflows: The total amount of money withdrawn from investment products, indicating more selling than buying activity.
- Exchange-Traded Products （ETPs）: Financial instruments traded on exchanges, similar to stocks, that track the performance of an underlying asset, index, or other financial instrument.
- Assets Under Management （AUM）: The total market value of the investments that a financial institution manages on behalf of clients.
- Spot Market: A public financial market in which financial instruments or commodities are traded for immediate delivery.
- Short Bitcoin Funds: Investment products that profit when the price of Bitcoin falls, allowing investors to hedge against or bet on declines in Bitcoin’s price.
By understanding these key concepts and staying informed about the factors driving market movements, investors can better navigate the challenges of the current economic environment and make more informed decisions regarding their crypto investments.