Bitcoin (BTC), the leading cryptocurrency, experienced a significant decrease in its investment products over the past week while Litecoin and XRP gained traction amidst Bitcoin’s decline, according to CoinShares, a renowned crypto asset manager.
CoinShares reported that there was a significant $107 million outflow from digital asset investment products last week. The main contributor to the outflows was Bitcoin, which recorded a substantial $111 million in outflows, marking its highest level since March.
Digital asset investment products saw outflows this week, totalling US$107m with profit taking gathering pace in recent weeks. Bitcoin was again the primary focus, seeing outflows totalling US$111m, the largest weekly outflows since March. https://t.co/U9xyQuBLsR
— Wu Blockchain (@WuBlockchain) August 7, 2023
Additionally, Ethereum, the second-largest cryptocurrency, experienced outflows worth $6 million. Therefore, the combined outflows from Bitcoin and Ethereum reached a total of $117 million for the week.
Investors’ disinterest in Bitcoin and Ethereum is evident from the recent outflows. Lacking significant positive news, these top cryptocurrencies have experienced a decrease in popularity.
In contrast, XRP and Litecoin, two well-established altcoins, have witnessed inflows as investors seek alternatives to Bitcoin and Ethereum. Over the past week, XRP received approximately $0.5 million, while Litecoin garnered around $0.46 million in investments.
The influx of funds into XRP and Litecoin demonstrates investor confidence in these altcoins, particularly following the ruling on July 13 that clarified their non-security status when traded on exchanges.
LunarCrush, social analytics service, recently reported a significant surge in social engagement for Litecoin. In just one hour, there were an astonishing 2.16 million social engagements for halving events, highlighting the widespread activity surrounding social posts.
Litecoin Halving Boosts Network Fundamentals
The demand for Litecoin may have been boosted by its third halving event on Aug. 2 at block 2,520,000. This event reduced mining rewards from 12.5 LTC to 6.25 LTC per block, making Litecoin scarcer and more valuable.
Despite limited price movement, Litecoin has maintained strong network fundamentals as indicated by its hashrate nearing a new all-time high, according to a recent tweet. The current difficulty of 933.2 TH/s also approaches a new record for Litecoin.
Both the hashrate and difficulty act as indicators reflecting the sentiment of the mining community. A higher hashrate signifies increased participation in the LTC network, enhancing security and stability.
When Litecoin was first launched, the block reward for miners stood at 50 LTC. However, this amount underwent reductions during subsequent halving events. The reward was first decreased to 25 LTC and further reduced to 12.5 LTC in the last halving event.
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Prior to the recent halving, which occurred on August 2, 2023, the block reward remained fixed at 12.5 LTC. As a result of this most recent halving event, the block reward has now been lowered to just 6.25 LTC.