Why BTC Outflows Persist Despite Renewed Hopes of Crypto Comeback

• BTC’s outflows continue to grow despite renewed hope in the crypto ecosystem.
• As Shanghai Upgrade approaches, investors shy away from Ether products.

According to a new report from CoinShares, digital asset investment products recorded six consecutive weeks of outflows totaling $95 million. Over the past five weeks, there have been $406 million in outflows from investment products, with a notable portion of these outflows related to Bitcoin [BTC].

Digital investment firm CoinShares found that the $406 million in outflows recorded over the past five weeks represented 1.2% of total assets under management (AuM). Despite the outflows in the past week, assets under management rose 26% to $33 billion. This is the highest asset under management since the collapse of Three Arrows Capital in June 2022.

This meant that while there has been a trend of outflows in digital asset investment products, assets under management still rose significantly over the past week. This may indicate that investors were still interested in digital assets despite concerns and volatility in the market.

The report further found:

“Trading volume in investment products was double the average at $2.6 billion.”

The high trading volumes recorded last week indicated that there was still significant activity in the market, which may signal increased confidence among investors.

Source: CoinShares

Bitcoin products looked out of liquidity despite improving sentiment

Despite the positive sentiment in the crypto market last week, BTC saw outflows from investment products totaling $113 million. According to CoinShares, the negative sentiment towards the king coin was in “stark contrast to the broader crypto market”, which performed relatively well over the same period. Interestingly, despite last week’s outflow, BTC’s assets under management jumped 32%.

On the other hand, Short-Bitcoin products saw record entry of $35 million last week. However, assets under management fell by 13% in the same period.

Commenting on why the positive sentiment in the market failed to affect BTC, CoinShares said:

“It is clear that this sentiment is opposite to the rest of the crypto market, but it may be partly driven by the need for liquidity during this banking crisis, a similar situation was seen when the COVID panic first hit in March 2020.”

Source: CoinShares

Ether continues to see outflows

Rather failed to take advantage of last week’s bullish sentiment, which led all Ethereum [ETH] recorded outflows of $13 million. This brought monthly outflows to $23 million, per CoinShares report.

As for other altcoins, they:

“Used the trend and only saw inflows totaling $1.3 million last week.”

Ethereum Investment products’ outflow can be attributed to the uncertainty surrounding ETH’s price once the Shanghai upgrade is implemented. With the upgrade scheduled to take place in April, investors have a prevailing sense of caution.

Source: CoinShares