Digital asset investment products have seen a significant decrease recently with $55 million in outflows during the week of September 13-19. This downward trend is largely linked to the dwindling optimism surrounding the possible approval of a spot-based Bitcoin exchange-traded fund (ETF). A staggering $42 million worth of the week’s outflows resulted from BTC alone. Other cryptocurrencies such as ETH, Polygon, Litecoin and Polkadot followed suit with combined outflows amounting to $11 million.
However, not all cryptocurrency assets were in the red. Two cryptocurrencies, namely Ripple and Cardano, reported positive figures for the week with inflows of $1.2 million and $100,000 respectively.
The negative figures were not limited to cryptocurrencies alone. Geographically, nearly all territories reported outflows with Canada taking the top position with $35.9 million in outflows, and Germany and the U.S. following closely with $11 million and $5.5 million respectively. The only territories to report inflows were Switzerland and Australia with $3.5 million and $100,000 respectively.
These heavy outflows are thought to be a response to the U.S. Securities & Exchange Commission’s (SEC) apparent lack of enthusiasm towards approving a Bitcoin ETF. The regulatory body’s perceived hesitation has cast a shadow upon the future of cryptocurrency, possibly instilling uncertainty amongst investors.
Many experts speculated that the approval of a spot-based Bitcoin ETF could be a major turning point for the cryptocurrency market. Research boutique Fundstrat argued that should the SEC commence approving spot-based Bitcoin ETFs, Bitcoin’s value could skyrocket to over $150,000 by the end of 2024.
Yet, it’s imperative to note that the crypto market, although growing, still has a great deal of unpredictable variables at play. For instance, rejection of the Bitcoin ETF by SEC can fuel negativity in the market that may not only impact Bitcoin but the wider digital asset market. Also, the ongoing uncertainty and speculation make it difficult to provide a comprehensive long-term prognosis for cryptocurrencies. Nevertheless, the growth and continuing development of this sector imply that it’s a force to be considered seriously. After all, the pioneers of the digital age once faced similar skepticism before their visions eventually came to fruition.
Understanding the inherently volatile nature of cryptocurrencies, market participants should base their decisions on concrete analysis and personal judgment, rather than succumb to the sway of the market sentiment. The key is to stay informed and up-to-date with latest market developments, so as to capitalize on opportunities and mitigate potential losses.
Source: Cointelegraph
