The past week saw a total outflow of $147 million from crypto asset investment products, largely driven by stronger-than-expected economic data. Investors exited Bitcoin with $159 million in outflows, while short Bitcoin positions saw an inflow of $2.8 million. On a positive note, multi-asset investment products recorded a $29 million inflow, marking the 16th consecutive week of positive growth.
Investor Sentiment Weakens
Crypto asset investment products saw $147 million in outflows last week, largely due to economic data exceeding expectations. This development has lowered the likelihood of central banks cutting interest rates, causing investors to scale back their risk appetite. The weakening sentiment was also reflected in trading volumes, which rose by only 15% to $10 billion on a weekly basis. However, the broader crypto market experienced a noticeable decline in trading volumes, indicating that investors are approaching the market with caution and reassessing their assets.
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Regional trends show varying behaviors across markets. Canada and Switzerland performed better than other markets, with inflows of $43 million and $35 million, respectively. Meanwhile, countries like the U.S., Germany, and Hong Kong saw significant outflows. The U.S. witnessed a $209 million exit from investment products, while Germany and Hong Kong recorded outflows of $8.3 million and $7.3 million, respectively. This highlights the different approaches to crypto investments in various regions.
Focus Shifts Back to Bitcoin and Ethereum
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Investors were particularly focused on Bitcoin last week, with $159 million flowing out of the asset, while short Bitcoin positions saw an inflow of $2.8 million. The increase in short positions suggests that some investors are anticipating a drop in Bitcoin’s price. This trend underscores the uncertainty surrounding Bitcoin’s future price movements.
Ethereum also experienced a similar fate, with $29 million in outflows last week. Despite its broader use cases and technological infrastructure, investor interest in Ethereum continues to wane, and expectations for the asset remain subdued.
Multi-Asset Products Gain Popularity
On the other hand, multi-asset investment products attracted $29 million in inflows last week, continuing a 16-week streak of positive inflows. Since June, these products have accumulated $431 million in total inflows, representing 10% of assets under management. Multi-asset products offer investors the opportunity to diversify risk across multiple crypto assets, making them an increasingly popular strategy for those looking to spread risk across various cryptocurrencies rather than concentrating on a single asset.
Cryptocurrencies such as LTC, XRP, Cardano, and Solana saw smaller inflows, just below $1 million, further illustrating the broader shift toward diversified investment strategies.
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