The recent announcement of significant withdrawal of nearly $55 million from crypto-backed investment funds has sent tremors throughout the sector. Concerns persist over the capacity of the US Securities and Exchange Commission (SEC) to give the green light to a Bitcoin exchange-traded fund (ETF), triggering stark changes to the dynamics within the digital currency realm.
Of these withdrawals, Bitcoin-backed funds took a noteworthy hit. Last week saw an exodus of $42 million—a steep contrast to the uptick of $27 million in the prior week. This insight comes courtesy of the latest Digital Asset Fund Flows report released by the eminent crypto research and investment organization, CoinShares.
At the same time, funds linked to the fall in Bitcoin’s price noted a drain of $2.2 million for the week. Spelling a staggering 17-week run of withdrawals for bearish funds— leaving more than a hint of skepticism.
The other chief indicator of shifts in the investment tide was seen in funds tied to Ethereum. These funds saw their value depleted by $9 million over the week, a significant alteration, indeed!
Interestingly, funds connected to Binance’s BNB token managed to stay afloat without noteworthy inflow or outflow of capital, despite challenging news and a tough 10% tumble in BNB’s value over the week.
In light of these flows, CoinShares suggests the possible influencing factors. Media reports hinting at the SEC’s reluctance to approve a Bitcoin ETF may have stirred the pot. Furthermore, with crypto trading volumes remaining far below average, last week’s market unease might have catalyzed an adverse sentiment.
These fund outflows have reportedly spanned across most providers, with particular emphasis on Canada and Germany. In contrast, Switzerland and Australia became the rare exceptions, witnessing inflows of $3.5 million and $0.1 million respectively — hinting at varied regional reactions.
The uncertainty spawned by the SEC’s upcoming decision, the less-than-average trading volumes and overall market jitters, have collectively echoed in the latest market overview. As the dust settles, the debate stands unresolved between the advocates for blockchain technology and skeptics questioning the true prowess of these cryptocurrencies. But as always in the world of crypto, change is the only constant.
Source: Cryptonews
