A $126 million modest outflow from digital asset investment products occurred last week as investors showed reluctance amid a strong price trend that had paused.
TakeAway Points:
- Activity in exchange-traded products (ETPs) and exchange-traded funds (ETFs) dropped relative to the overall market.
- Bitcoin experienced a 2.8% surge over a 24-hour period, reaching a trading value above $66,500, while ether (ETH) advanced to $3,240 after multiple issuers in Hong Kong announced that they received approval for spot crypto ETFs.
- Markus Thielen, the head of research at 10x Research, estimated that Bitcoin miners have the potential to liquidate approximately $5 billion worth of BTC after the halving.
Bitcoin loses $110 million
According to a CoinShares analysis, activity in exchange-traded products (ETPs) and exchange-traded funds (ETFs) decreased in comparison to the total market, despite a minor increase in trading volumes from $17 billion to $21 billion on a weekly basis.
The fact that ETP/ETF activity made up 40% of all volumes on reliable exchanges a month ago dropped to 31% last week, suggesting that investors are becoming more cautious.
According to the research, Bitcoin has had $110 million in withdrawals but has seen $555 million in positive inflows so far this month. After three weeks of outflows, there were slight inflows of $1.7 million into short bitcoin, probably taking advantage of the current price dip.
Comparatively speaking, Ethereum was the most hit, with withdrawals of $29 million during the previous week, its sixth straight week of losses. But altcoins had a good week, drawing inflows from a few lesser-known names.
Inflows of $2.9 million, $1.8 million, and $4.9 million were recorded by LIDO, Decentraland, and Basic Attention Token, respectively. With outflows of $145 million, the United States was the country with the most outflows, followed by Switzerland and Canada with outflows of $5.7 and $6 million, respectively.
Conversely, investors in Germany viewed recent price weakness as an opportunity and injected $29 million in inflows last week. The cautious sentiment among investors reflects their wariness of the current market conditions and the uncertain trajectory of digital assets.
Last week, investors poured a total of $646 million into crypto products, pushing the year-to-date inflows to an unprecedented $13.8 billion and surpassing the previous year’s total of $10.6 billion. Bitcoin was the primary focus for investors, with inflows totaling $663 million.
Bitcoin Rises with Hong Kong’s Approval of Spot ETFs
Bitcoin experienced a 2.8% surge over a 24-hour period, reaching a trading value above $66,500, while ether (ETH) advanced to $3,240 after multiple issuers in Hong Kong announced that they received approval for spot crypto ETFs.
China Asset Management, Bosera Capital, and other applicants took to the social media platform WeChat (Weixin) to share the news of their approval to list spot Bitcoin and Ether ETFs in Hong Kong.
The news is significant as analysts predict mainland Chinese investors could pour $25 billion into potential Hong Kong-listed spot Bitcoin ETFs through the Southbound Stock Connect programme. The Southbound Stock Connect allows qualified mainland Chinese investors to access eligible shares listed in Hong Kong.
Meanwhile, a notable outflow of Bitcoin from miners could be on the horizon in the months following the upcoming halving event.
In a recent note, Markus Thielen, the head of research at 10x Research, estimated that Bitcoin miners have the potential to liquidate approximately $5 billion worth of BTC after the halving.
Thielen also highlighted that this selling pressure from miners could persist for four to six months, leading to a potential sideways movement in Bitcoin’s price during that period, similar to what has been observed in past halving cycles.
