In the aftermath of a recent market correction, cryptocurrency investment products witnessed a significant withdrawal of $942 million over the past week. This downturn comes after seven consecutive weeks of inflows, totaling over $12 billion, with investors displaying a cautious stance towards the volatile market.
Cryptocurrency ETP Volume Hits $28 Billion, Asset Management Drops by $10 Billion
Trading volumes for exchange-traded products (ETPs) remained substantial at $28 billion, constituting two-thirds of the previous week's volumes. The correction led to a notable decrease in total assets under management for these products, dropping by $10 billion to $88 billion.
Bitcoin-focused investment products bore the brunt of the outflows, experiencing a withdrawal of $904 million, while Ethereum-focused products saw a lesser outflow of $34.2 million. Additionally, altcoins like Solana and Cardano witnessed outflows of $5.6 million and $3.7 million respectively, with multi-asset products facing $7.3 million in outflows.
XRP and Polkadot Investment Products See Inflows Amid Record Bitcoin Spot ETF Outflows
Despite the overall outflows, investment products linked to XRP saw $1.2 million in inflows, while those associated with Polkadot ($DOT) experienced $5 million in inflows, signaling a mixed sentiment among investors.
Spot Bitcoin exchange-traded funds (ETFs) recorded unprecedented net outflows, totaling $888 million, marking the longest streak of outflows to date. This surpasses the previous four-day record set in January. Notably, Grayscale's GBTC suffered significantly during this period.
Coinbase Research highlighted a potential source of selling pressure, as Genesis Global's bankruptcy estate prepares to sell a substantial portion of GBTC shares. This action, separate from shares used as collateral for a loan, could further impact the market.
While the exact implications of these events remain unclear, the timing of significant changes in GBTC shares raises questions about their potential influence on market dynamics.