In the week concluding Aug. 4, cryptocurrency assets witnessed an outflow of $107 million tracking a three-week negative trend. Notably, the major chunk of this movement was contributed by Bitcoin, with $111 million in outflows. According to CoinShares’ Digital Asset Fund Flows weekly report, this amounts to a “profit-taking” phase following the gains of the previous cycle.
Over the month preceding these outflows, inflows of $742 million into crypto funds were recorded, with an overwhelming 99% stemming from Bitcoin. However, it’s worthwhile to note that weekly trading volumes in investment products dipped below the year-to-date average. The report showed that broader on-exchange market volumes were substantially down by 62% compared to the relative average.
On the global map, only Australia and the United States reported inflows with a meagre $0.3 million and $0.2 million respectively. Canada and Germany experienced the largest regional outflows with a whopping $70.8 million and $28.5 million.
But not all seemed bleak. Solana took center stage with inflows worth $9.5 million, a significant jump from the previous week’s total of mere $0.6 million. Similarly, XRP’s investment products also registered inflows, albeit a relatively minor $0.5 million.
However, Ether funds continued their negative streak, adding $5.9 million to the previous week’s $1.9 million in outflows. This completely offset the preceding inflows amounting to $6.6 million and further fueled Solana’s current bullish trend.
While Bitcoin’s annual performance remains positive compared to its position in January, some experts assert that the sideways movement keeping it largely under $30,000 since April is primarily due to market uncertainty. Interestingly, data from Switzerland-based investment advisor 21e6 Capital AG reveals that Bitcoin “hodlers” outpaced crypto funds by a stunning 69% in H1 2023.
The 2022 debacle of FTX and regulatory uncertainties for numerous other exchanges might have tempted crypto fund investors to enhance their liquid reserves versus invested funds, possibly being one of the causes behind the current downturn. That said, the report from 21e6 Capital AG also notes a slight uptick in investor sentiment compared to the first half of 2023. While these swings in the crypto universe predict a dynamic future, the question of consistent profitability still hangs in the balance.
Source: Cointelegraph
