hold or not - Cryptocurrency Asset Flows Continue Negative Trend with $107 Million Outflows

In the week ending on August 4, cryptocurrency asset flows recorded a total of $107 million in outflows, continuing a three-week negative trend that amounted to $134.8 million.

Once again, the primary factor behind this movement was Bitcoin (BTC), which experienced $111 million in outflows. These outflows offset the majority of inflows seen in the market during the week.

According to CoinShares’ “Digital Asset Fund Flows” weekly report, this trend indicates further “profit taking” following the gains from the previous market cycle.

In the month leading up to the recent outflows, crypto funds had seen inflows of $742 million, with a significant 99% of those inflows directed towards Bitcoin.

Weekly trading volumes in investment products experienced a decline below the year-to-date average, with broader on-exchange market volumes down by 62% compared to the relative average.

Regionally, only Australia and the United States demonstrated inflows of $0.3 million and $0.2 million, respectively.

Conversely, Canada and Germany witnessed the largest outflows, with $70.8 million and $28.5 million, respectively.

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Despite the outflows from Bitcoin, the total weekly outflows were partially offset by inflows into Solana (SOL), amounting to $9.5 million, a significant increase from the previous week’s $0.6 million inflows.

Additionally, investment products related to XRP (XRP) also experienced inflows of $0.5 million.

However, Ether (ETH) funds continued their negative trend, with an additional $5.9 million in outflows following the previous week’s $1.9 million.

These outflows offset the prior inflows of $6.6 million, further distinguishing Ether from the current bullish trend of Solana.

Bitcoin has maintained its overall value since the beginning of the year compared to its January opening, but market experts believe that the sideways movement observed since April, mostly below $30,000, is a result of market uncertainty.

Data from Switzerland-based investment adviser 21e6 Capital AG revealed that “hodlers” of Bitcoin, those who held funds in BTC, outperformed crypto funds by 69% in the first half of 2023.

The 2022 implosion of FTX and regulatory and legal uncertainties surrounding several other exchanges may have prompted crypto fund investors to increase their cash reserves rather than investing further, contributing to the current decline.

The report from 21e6 Capital AG also noted a slight increase in investor sentiment compared to the first half of 2023.