Cryptocurrency asset outflows reached a total of $59.3 million for the week of September 3 to 9, continuing a streak of outflows that has now totaled $249 million over four consecutive weeks. The majority of activity last week was centered around Bitcoin (BTC), which experienced $68.9 million in outflows. However, this was partially offset by inflows of $15.2 million into Short Bitcoin positions and $0.7 million into XRP (XRP).
According to CoinShares, the main drivers behind the outflow streak are regulatory uncertainties and market insecurity. The company stated, “We believe continued worries over regulation of the asset class and recent dollar strength are the most likely reasons for this. Trading volumes also dropped significantly, by 73% in comparison to the prior week to just US$754 million for the week.”
In addition to Bitcoin, other cryptocurrencies also saw outflows during the week. Solana (SOL), which had experienced nine weeks of consecutive inflows totaling $14.1 million, saw outflows of $1.1 million. Ether (ETH) also had outflows of $4.8 million, making it the second-highest outflow after Bitcoin. CoinShares labeled Ether as the “least loved digital asset amongst ETP [exchange-traded product] investors this year,” with year-to-date outflows totaling $108 million.
Geographically, only Brazil registered inflows with a modest $0.1 million. Germany, Canada, and the United States led the activity with outflows of $20 million, $17.6 million, and $12.3 million, respectively. Switzerland and Sweden also experienced significant outflows, with Switzerland losing $7.4 million and Sweden losing another $2.3 million.
Looking ahead, expert analysts are predicting a continuation of Bitcoin’s slump, with some expecting the coin to reach as low as $20,000. This negative sentiment could further contribute to outflows. The current four-week run of outflows suggests that altcoins are unlikely to disrupt the balance of flows significantly.
The cryptocurrency market continues to be volatile, with regulatory concerns and market uncertainties impacting investor sentiment. As the industry evolves and regulatory frameworks become clearer, it is expected that stability and investor confidence will increase. In the meantime, market participants will continue to closely monitor the trends and flows in the cryptocurrency space.
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