The “sweet bears” era of crypto assets seems to be over, at least for now. Following a record-breaking seven weeks of inflows, CoinShares’ latest Crypto Asset Fund Flows report reveals a significant shift in investor sentiment. Meanwhile, entries for XRP coin and 2 altcoins seem to have increased. Here are the details…
Outflows are quite high in CoinShares report
The report, published on March 18, 2024, details record weekly outflows of $942 million, marking a sharp turnaround from inflows of $12.3 billion in the previous period. This sudden change is attributed to the recent price correction in the crypto market. The report suggests that the correction, which erased $10 billion from total assets under management (AuM), caused investors to hesitate. While total AuM remains above the previous cycle’s high of $88 billion, the decline appears to have shaken confidence. Million-dollar outflows in Bitcoin, ETH, Solana, short Bitcoin and Cardano attracted attention.
The exit trend has affected both established and new players in the market. Grayscale, one of the dominant players in the industry, witnessed a significant exit of USD 2 billion, which cast a shadow on the overall sentiment. But new US ETF issuers provided a glimmer of hope, with $1.1 billion in inflows partially offsetting Grayscale’s losses. The report also emphasizes that the negative sentiment is not limited to the US market. European regions such as Sweden, Switzerland, Germany and Hong Kong also experienced outflows totaling 101 million US dollars.
However, Brazil and Canada defied this trend, recording inflows of $9 million and $8.4 million respectively. This suggests that investor optimism is still present in some regions. Bitcoin, the undisputed king of cryptocurrencies, bore the brunt of the outflows. The report reveals a staggering $904 million outflow from Bitcoin, indicating a significant loss of investor confidence in the leading crypto asset. Even short Bitcoin positions, which typically benefit from price declines, saw small outflows of $3.7 million.
There are fund entries for XRP coin, AVAX, DOT, LTC
Other major altcoins such as Ethereum, Solana, and Cardano also experienced outflows totaling $43.3 million, albeit on a smaller scale. This shows that the market correction is affecting investor sentiment in general, not just in Bitcoin. Interestingly, the report reveals a positive trend for a select group of altcoins. Polkadot, Avalanche, and Litecoin bucked the trend, experiencing net inflows of $5 million, $2.9 million, and $2 million, respectively. Additionally, XRP exhibited an inflow of $1.2 million. This could be indicative of investors focusing on certain altcoins with perceived potential.
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