Significant power outflow from Bitcoin-supported funds

Regulated cryptocurrencies experienced outflows of nearly $ 100 million last week as capital continued to evaporate en masse from Bitcoin (BTC) and Ethereum (ETH) supported funds. The outflow was partly driven by tax-related divestitures in the US, while an analyst said the macro landscape for the crypto sector has now improved.

Significant power outflow from Bitcoin-supported funds
Source: Adobe / Wirestock Creators

“The outflow represents the second week of what we believe is likely the result of recent profit-taking and a reaction to the opinion of Federal Open Market Committee (FOMC), “he said Coin shares. According to them, the outflow in the period from 4 to 11 April took place mainly in the USA, while most outflows last week took place in Europe (88%), which may be a late reaction to the FOMC declaration.

Moreover, according to analysts, investors seem to have increased the amount of short Bitcoin investment products after a few weeks of inflow.

Meanwhile, over the past week, ETH-backed funds have seen their outflow accelerate to $ 27 million, from $ 15.3 million the previous week, according to new data from research firm Investment in CoinShares cryptocurrencies.

On the more positive side, BTC-supported funds saw their outflow decrease compared to the previous week. After registering outflows of $ 132 million two weeks ago, BTC funds saw outflows of $ 73 million last week.

The only cryptocurrency fund category that saw inflows last week were multi-asset funds, which received $ 5.3 million, according to data from CoinShares.

Year to date, the outflow from BTC-supported funds amounts to $ 196 million.

Source: CoinShares

The issuer of the fund that experienced the biggest outflows last week is ETC Groupwhich lost 75.9 million. Purpose is the fund that recorded the largest inflow, with an additional $ 11.7 million.

Source: CoinShares

The outflow from cryptocurrency-backed investment funds is attractive given the current macroeconomic environment, which shares experts on the medium-term outlook for the crypto market.

In a comment on the state of the market earlier Tuesday, Marcus Sotiriouanalyst at the cryptocurrency broker GlobalBlock, said the macroeconomic background now looks “positive”. The most important thing is not to know how much US Federal Reserve will raise interest rates soon, but “consumer strength,” Sotiriou said.

“Despite many funds and economists predicting a recession, facts suggest we may have a soft landing. Therefore, I think the near term is bullish for Bitcoin and equities, whether there is an increase in the price of 50 basis points or not, “the analyst said in an email comment.

Meanwhile, the provider of cryptocurrency services BabelFinans said in its latest report that the shortseller mood in the market has been strengthened. This is clear when looking at the 7-day average financing rate for perpetual futures, which hit a new low-level low over the past week, the firm said.

The company adds that April is also tax season in the United States, where many investors must file their tax returns by April 18th. This event is known for getting the market to sell out as traders liquidate their cryptocurrency holdings to pay their taxes.

Follow our affiliate links:

  • Buying cryptocurrencies in the SEPA zone, Europe and French citizensvisit Coinhouse
  • Buying cryptocurrency in Canadavisit Bitbuy
  • To generate interest with your bitcoinsgo to the BlockFi website
  • To secure or store your cryptocurrenciesget Ledger or Trezor wallets
  • To trade your cryptocurrencies anonymouslyinstall the NordVPN app

To invest in cryptocurrency mining or masternodes:

To collect coins while playing:

  • In poker on the CoinPoker gaming platform
  • To a global fantasy football on the Sorare platform

Stay informed with our free weekly newsletter and to our social network:

Leave a Comment