Bitcoin sheds $400M as investors flee risk assets

Digital asset investment products experienced significant outflows last week, with Bitcoin leading the charge amid growing concerns of a U.S. recession and geopolitical tensions. The cryptocurrency market felt the impact of broader asset sell-offs, resulting in substantial liquidations across various classes.

According to the recent Digital Asset Fund Flows Weekly Report by CoinShares, investments in digital assets experienced an outflow of $528 million, signaling the first drop in four consecutive weeks. The report links this trend to growing concerns about a potential economic downturn in the U.S. amid persistent geopolitical uncertainties.

Bitcoin, often seen as a reliable refuge in times of market volatility, faced a downturn recently. The primary digital currency saw an outflow of $400 million, interrupting a streak of five consecutive weeks of inflows. This sudden shift sheds light on the overall apprehension in the market, impacting even assets known for their resilience.

Ethereum follows Bitcoin footsteps, experiencing downward

Ethereum encountered significant downward pressure, leading to outflows totaling $146 million. This resulted in a cumulative net outflow of $430 million for Ethereum since the introduction of U.S.-based ETFs. Despite the $430 million positive influx into newly launched U.S. ETFs, it was mitigated by substantial outflows of $603 million from the well-established Grayscale trust.

The repercussions of these financial outflows reverberated throughout the entirety of the digital asset realm. The subsequent price adjustment, post-Friday’s closure, erased a staggering $10 billion from the assets managed through ETPs. Throughout the week, trading volumes in ETPs peaked at $14.8 billion, representing a mere 25% of the overall market activity, falling below the usual standards.

Regionally, the United States bore the major impact of the outflows, totaling $531 million. Meanwhile, Germany and Hong Kong faced outflows of $12 million and $27 million, respectively. On the other hand, Canada and Switzerland embraced the price slump as an opportunity, welcoming inflows of $17 million and $28 million, correspondingly.