Yet, recent trends paint a different picture. Bitcoin’s value has stagnated, and this lull has cast shadows over the mood in digital asset funds. CoinShares, a prominent digital asset manager, has observed that Bitcoin withdrawals from institutional accounts have become more frequent recently.
Recent Trends in Digital Asset Investments
There’s been a notable increase in outflows from digital asset investments in the last few weeks, suggesting a three-week trend. This might hint at institutional investors’ growing apprehension towards unstable cryptocurrencies. Interestingly, this surge in outflows comes after a short-lived inflow, spurred by Ripple’s partial court win and the latest US inflation figures.
However, last week signaled a return to outflows. The enthusiasm post-Ripple’s partial victory against the SEC seems to have waned. Outflows from digital asset investments reached $55 million, with Bitcoin accounting for $42 million. Meanwhile, Ethereum saw outflows of $9 million, and Polygon, Litecoin, and Polkadot witnessed outflows of $0.9 million, $0.6 million, and $0.5 million, respectively. Conversely, XRP and Cardano recorded increased inflows.
Region-wise, Canada led with outflows of $35.9 million, closely followed by Germany at $11 million.
Factors Behind the Surge in Bitcoin Outflows
The current trend of Bitcoin outflows from exchanges might suggest that large-scale investors are becoming wary. Fueling this sentiment are rumors that the SEC might not greenlight applications for spot Bitcoin ETFs in the US. Consequently, assets under management have shrunk by 10%, settling at $32.3 billion by the week’s end.
These speculations aren’t baseless. The SEC’s repeated deferment on the Spot Bitcoin ETF applications has intensified doubts about their eventual approval. A clear rejection from the SEC might drag Bitcoin’s price down to $20,000, prompting even more withdrawals from digital asset investments.
As of this article’s publication, Bitcoin trades at $26,053, marking an 11.09% decline over the past week.
Featured image from Unsplash, chart courtesy of Tradingview.com