Bitcoin Price Drops Trigger $110M Bitcoin Outflows as Crypto Funds Risk Off

CoinShares, a digital asset management firm, has reported that institutional investors have reduced their exposure to digital assets, resulting in minor outflows from crypto investment products. According to CoinShares’ “Digital Asset Fund Flows Weekly” report, total outflows from crypto investment products reached $126 million in the past week. The majority of these outflows, totaling $110 million, were attributed to Bitcoin. CoinShares suggests that this outflow is a sign of hesitancy among investors due to the waning positive momentum in the market. In the month leading up to these outflows, there were inflows of $520 million into crypto funds, with over 99% of that going to Bitcoin.

The report also reveals that weekly trading volumes in investment products rose from $17 billion to $21 billion in the week ending April 12. The proportion of ETP/ETF activity relative to the overall market dropped from 40% to 31%, indicating caution among investors. This decrease in activity can be attributed to geopolitical tensions and uncertainties surrounding Federal Reserve rate cuts in June.

Institutions withdrew nearly $82 million from spot Bitcoin trades ETFs between April 8 and April 12, with a significant exodus from Grayscale’s GBTC. While there were inflows from Australia, Brazil, and Germany, the United States saw the largest outflows, totaling $145 million.

Despite Bitcoin’s positive performance over longer time frames, recent price action has been marked by high volatility. Bitcoin fell sharply on Monday from $66,008 to an intraday low of $63,940. Analysts predict more price corrections based on several factors such as high average 30-day funding rates, resistance from the current all-time high, and a market setup that allows large players to establish large positions.

The recent drop in Bitcoin prices coincided with Hong Kong’s approval of spot Bitcoin ETFs, making it the second country to do so. The launch of these ETFs is yet to happen, dampening investor sentiment. Bloomberg ETF analyst Eric Balchunas warns against expecting significant flows from the Hong Kong market, as it is relatively small compared to the US ETF sector. Combined with geopolitical tensions in the Middle East, these factors are likely to drive Bitcoin prices lower until after the Bitcoin supply halving.

4 thoughts on “Bitcoin Price Drops Trigger $110M Bitcoin Outflows as Crypto Funds Risk Off

  1. This just shows that institutional investors are losing interest in digital assets

  2. The approval of spot Bitcoin ETFs in Hong Kong doesn’t seem to be boosting investor sentiment

  3. The drop in trading volumes and caution among investors are not good signs for the market

  4. High volatility and price corrections are making it difficult to trust Bitcoin

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