Market Outflows Dominate Bitcoin, Ethereum, and Other Crypto Funds

CryptoMode Warren Buffett Bitcoin Ran Neuner Outflows

Over the previous week, the cryptocurrency market observed a significant outflow of $32 million, as reported by the CoinShares Digital Asset Fund Flows’ weekly report dated May 22nd. It marks the fifth consecutive week of declining institutional crypto asset funds, culminating in a cumulative loss totaling $232 million.

This surge of outflow, however, is characterized by a decrease compared to the trends noted in the preceding three weeks.

Bitcoin Fund Experiences A Tidal Wave of Outflow

Among the various types of funds, Bitcoin funds experienced the brunt of the negative sentiment, witnessing an exodus of $33 million. Ethereum funds, on the other hand, witnessed a comparatively minor setback, with outflows totaling a mere $1 million, as per the CoinShares’ report.

The report also highlights a significant dip in trading volumes, which stood at $900 million for the week – a steep 40% below the annual average. The same trend permeated centralized exchanges. Market volumes across trusted exchanges plummeted to their lowest point since late 2020, totaling a paltry $20 billion for the week.

Regional Analysis of Crypto Outflows

Zooming into a geographical perspective, Germany leads the pack in outflows, accounting for 73% of the total, or $24 million. Simultaneously, Switzerland-based institutional funds experienced outflows to $3.3 million. This widespread exodus from crypto coincided with the approval of Europe’s MiCA crypto legislation.

Contrarily, the U.S. saw a smaller outflow of $5.5 million over the week. However, some geographical regions showed resilience, as illustrated by an inflow of $2.2 million in the crypto-friendly landscape of Canada, with Brazil also recording minor inflows of $1.3 million.

Short Bitcoin funds were not immune to the negative trend, registering a minor outflow of $1.3 million for the week. CoinShares has been left to speculate about the coordinated negative sentiment impacting both long and short-investment products.

The Multi-asset altcoin funds seemed to buck the trend, recording an inflow of $1.6 million, with Litecoin, XRP, and Avalanche funds also marking minor inflows.

The Rise of Bitcoin HODLing Despite Institutional Outflows

Even amid the gloom of institutional outflows, Bitcoin holding is seemingly emerging as the market’s dominant narrative, as per analytics provider Glassnode. 

Their weekly on-chain report points out that existing Bitcoin holders are showing remarkable resilience, maintaining their conviction despite the extreme volatility and substantial deleveraging over the last two years.

The unfolding dynamics of the cryptocurrency market signal a volatile period marked by significant outflows. However, the growing trend of Bitcoin holding suggests a compelling counter-narrative underpinned by the unwavering conviction among existing Bitcoin holders. 

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