Crypto investment products see outflows for second consecutive week

Crypto investment products see outflows for second consecutive week

According to data from digital asset investment business CoinShares, investments in digital asset funds have decreased for the second straight week, with $206 million in withdrawals between April 15–19.

Crypto investment products see outflows for second consecutive week

In the last week, outflows have been driven by declining Bitcoin prices, with $66,158 in money leaving the market ahead of the halving event by $192 million. Investment goods with ether tickers down $3,165 also saw $34 million in withdrawals, their sixth week of negative flow.

Additionally, there has been a decrease in investment in blockchain stocks, with the industry reporting $9 million in withdrawals for the eleventh week in a row.

As per sources, the decline in value is probably due to investors’ apprehensions regarding the escalation of interest rates in the US, which has the potential to render less hazardous financial products more appealing in contrast to volatile assets like cryptocurrencies.

If the economy cooperated, the Federal Reserve planned to loosen its monetary policy in the middle of 2024, but recent inflation readings have dashed those aspirations. For the third month in a row, the annual Consumer Price Index rose by 3.5%, beating forecasts and suggesting that lower rates would not materialize until 2025. Right now, the federal funds rate ranges from 5.25% to 5.50%.

“The data suggests appetite from ETP/ETF investors continues to wane, likely off the back of expectations that the FED is likely to keep interest rates at these high levels for longer than expected.”

Over the week, trading activity for Bitcoin exchange-traded funds (ETFs) decreased somewhat to $18 billion. However, outflows of Bitcoin funds were not viewed as a chance to short the cryptocurrency. CoinShares claims that although investors are moving away from volatility, the trend suggests that they do not necessarily anticipate a Bitcoin price crash anytime soon.

“These volumes represent a lower percentage of total Bitcoin volumes (which continue to rise) at 28%, compared to 55% a month ago,” the report said.

Since their peak in March, inflows into Bitcoin ETFs have considerably decreased. In the meantime, investor interest in BlackRock’s iShares Bitcoin Trust (IBIT), the largest ETF in terms of managed assets, remained consistent this month, with positive flows totalling $1.4 billion as of April 19.

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