Crypto exchange-traded products (ETPs) experienced a significant sell-off last week, with investors withdrawing approximately $2.9 billion from these funds, according to a report by CoinShares. This marks the largest weekly outflow on record for ETPs. The recent wave of withdrawals extends a three-week streak of outflows, totaling $3.8 billion.
Several factors are likely driving this sell-off. Investor concerns have heightened following the recent $1.5 billion hack on crypto exchange Bybit, as well as the Federal Reserve’s increasingly hawkish stance on monetary policy. These factors have contributed to a shift in sentiment among investors, prompting them to lock in profits amid growing market uncertainty.
Bitcoin, the largest cryptocurrency, experienced the most significant outflows, losing $2.6 billion over the past week. On the other hand, funds that bet against bitcoin, known as short Bitcoin ETPs, saw only a modest inflow of $2.3 million, indicating that bearish sentiment has not fully taken hold.
While most assets struggled, a few managed to buck the trend. Sui (SUI) emerged as the top performer with $15.5 million in inflows, followed by XRP (XRP), which also attracted fresh investment.
Spot Bitcoin ETFs faced a challenging week, with significant capital being withdrawn from these funds. BlackRock’s iShares Bitcoin Trust (IBIT), the largest of its kind, recorded a staggering $1.3 billion in outflows, marking the highest weekly withdrawal since its launch.
Additionally, CME Bitcoin futures open interest dropped sharply over the past two weeks, signaling a potential shift in institutional positioning. The narrowing spread between futures yields and risk-free returns has led traders to reallocate capital away from bitcoin derivatives in favor of safer, more liquid assets.
It’s important to note that while AI tools assisted in generating parts of this article, it has been reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, please refer to CoinDesk’s full AI Policy.
2 Comments
It’s fascinating to see how Bitcoin continues to dominate the crypto market, especially in the midst of the recent exodus from crypto ETPs. This report highlights the significant shifts and challenges within the industry, making it even more important for investors to stay informed and navigate the crypto landscape wisely. How do you think this exodus will impact the future of crypto ETPs?
Bitcoin continues to dominate the cryptocurrency market as CoinShares’ report reveals a massive $2.9 billion exodus from crypto exchange-traded products. This surge in Bitcoin’s popularity raises interesting questions about the future of other cryptocurrencies and the reasons behind this mass exodus. Let’s discuss the implications and potential consequences of this trend.