Bitcoin Funds Experience Weekly Outflows Of $111M, Highest Since March

Aug. 9, 2023
Bitcoin Funds Experience Weekly Outflows Of $111M, Highest Since March

Data from CoinShares revealed that digital asset investment products experienced outflows of $107 million in the past week ending August 4. Bitcoin (BTC) took center stage with outflows of $111 million. However, it is the largest weekly withdrawal of BTC since March of this year.

Weekly crypto asset flows

In a report, James Butterful, head of research at CoinShares, mentioned that outflows have increased in recent weeks due to high profit-taking deals. He also highlighted the drop in weekly trading volumes and on-exchange volumes.

Butterfill said:

“The summer doldrums are in full force with weekly trading volumes in investment products 36% below the year-to-date average.”

Furthermore, the on-exchange volumes have seen a significant decline, down 62% relative to the YTD average, he added. Canadian exchange-traded product (ETP) providers witnessed outflows totaling $71M. While German ETPs recorded outflows of $29M. Meanwhile, only the United States and Australia recorded inflows of $0.2M and $0.3M, respectively.

Moreoever, Ethereum products saw outflows of $6M. This brings the total amount withdrawn from BTC and ETH to $117M. Despite the sell-off in digital asset products, on-chain data indicates that long-term Bitcoin holders are still accumulating BTC. They are waiting for the next major bull market cycle.

According to the latest Bloomberg analysis, Bitcoin tourists aren’t actively participating. However, residents are currently owning 74.8% of the total BTC supply. Since 2020, 30% of BTC has been moved to cold storage, leaving exchanges with 2.26 million, as per the analysis.

Altcoins Take Center, After Bitcoin

Litecoin (LTC) and XRP saw inflows of $0.46M and $0.5M, respectively, as per data. Solana (SOL) recorded the most substantial increase, with $9.5M in inflows.

BTC has shown a positive performance for the year since its opening in January. However, experts believe the sideways movement, which has kept its price mostly below $30,000 since April, can be linked to market uncertainty.

According to a report by Cointelegraph, investment adviser 21e6 Capital AG in Switzerland indicates that BTC holders outperformed crypto funds by 68.8% in the H1 of 2023. During the first half of 2023, crypto funds produced a 15.2% return, while Bitcoin experienced gains of approximately 84%.

The bankruptcy of FTX in 2022 and regulatory uncertainties faced by several other exchanges may have urged crypto investors to increase their cash reserves instead of putting more money into investments.

Syed Ali Haider

Researcher & Editor
Ali Haider is a Blockchain enthusiast and writer passionate about enhancing the acceptance, adoption, and integration of Blockchain technology worldwide. He has also advocated for digital freedom and cybersecurity for many years.