It was another difficult week for crypto currency exchange-traded products (ETPs) as aggressive selling continued. Investors pulled out $1.7 billion, marking the fifth week of consecutive outflows. The total loss during the period amounted to $6.4 billion.
This loss also marked the 17th consecutive day of outflows, the longest in history since 2015. Bitcoin lost the most at another $978 million. Its five-week cumulative outflows were at $5.4 billion. Investors also shed short-bitcoin positions and withdrew $3.6 million.
Crypto outflows hit Binance and Ethereum
Ethereum saw $175 million of outflows, while Solana lost $2.2 million. XRP alone saw $1.8 million of inflows in the midst of the overall negative sentiment. The United States led the market decline with $1.16 billion of outflows.
This represented 93% of the negative run’s total withdrawals. Switzerland too felt the pinch with $528 million of outflows caused by the exit of a large seed investor. One of the few highlights was Germany, which recorded a small inflow of $8 million.
Binance took a sharp hit as one of its seed backers withdrew nearly all of its assets under management. Only $15 million were left behind once the giant exit took place. The ongoing outflows also impacted the overall market, bringing down the overall assets under management by $48 billion.
In spite of the prevailing negative pattern, year-to-date inflow levels continued to remain positive at $912 million. The sharp correction and ongoing outflows, though, have dented market confidence. Investors are still cautious as the crypto market is yet to gain momentum.
Crypto market uncertainty grows
This five-week downturn is reflective of shifting investor sentiment, with risk-aversion dominating the market. The record period of outflows has put pressure on digital asset prices and reduced the market’s liquidity. Institutional players have pulled back from the market, postponing re-entry until the market is displaying signs of stabilization.
The market has been hit by growing regulatory uncertainty to compound the sell-off. The macroeconomic backdrop of rising interest rates and inflation is believed to have contributed to the sell-off.
Also, profit-taking after the good start to the year could have triggered further selling. The confidence shaken, the market now waits to see signs of revival. Some of the investors believe that stabilization of Bitcoin prices could pacify the selling pressure.
Others remain skeptical that the market will bottom out before it experiences further corrections. The coming weeks will determine if digital currencies will change the direction of events or continue to fall.
