Investors Pull Back: $528 Million Vanishes From Crypto Funds Amid Economic Fear

Samuel Edyme

10 months ago

3 mins read

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The global economic market has now so far shown increasing signs of instability which appears to have impacted the overall crypto investment sector negatively. Recent data from CoinShares has revealed a reversal in the flow of funds, with crypto investment products experiencing significant weekly outflows.

As reported by CoinShares, this outflow marks the first time in over a month that the net balance has tipped from “accumulation to liquidation,” highlighting investor anxiety amid recession fears in the United States.

Deciphering The Crypto Fund Flows: Was There Any Green?

Analyzing the geographical distribution of these outflows presents a nuanced view of the current market stance. The report from CoinShares revealed that US-based funds were the hardest hit, recording net outflows of $531 million.

This figure was heavily influenced by a significant sell-off on Friday, where net outflows totalled $237.4 million, overshadowing any inflows earlier in the week.

The bulk of these withdrawals were from Bitcoin-based products, which saw a $400 million exit, ending five weeks of consecutive net inflows. Notably, there was a slight uptick in investments into Short Bitcoin funds, which garnered $1.8 million, marking their first significant inflows since June.

Conversely, certain regions displayed resilience or even optimism amidst the downturn. Swiss and Canadian markets bucked the trend by registering net inflows of $28 million and $17 million, respectively.

Crypto asset fund flows. | Source: CoinShares

This suggests that some investors are viewing the price declines as buying opportunities, possibly anticipating a market recovery. Ethereum-specific products also mirrored this volatile trend. Globally, Ethereum investment vehicles reported net outflows of $146 million.

The US spot Ethereum ETFs were particularly affected, with $169.4 million leaving these funds. However, this was part of a larger narrative where new Ethereum ETFs saw roughly about $433.6 million in net inflows, only to be overshadowed by $603 million in net outflows from Grayscale’s ETHE fund.

Behind The Outflows

The total of $528 million withdrawn from various crypto asset investment products last week alone comes on the heels of several notable economic pressures.

James Butterfill, the Head of Research at CoinShares, particularly attributed this exodus to mounting concerns over what they believe to be “a reaction to fears of a recession in the US, geopolitical concerns and consequent broader market liquidations across most asset classes.”

This mass withdrawal, according to Butterfill also coincided with a sharp market correction that erased roughly $10 billion from the total Exchange Traded Products (ETP) Assets Under Management (AUM) at the week’s close.

Regardless of this, so far, both Bitcoin and Ethereum appears to currently be seeing a slight rebound in their respective value. Currently, Bitcoin trades at $54,633 more than 2% from its lowest point of $49,221 seen earlier today.

Bitcoin (BTC) price chart on TradingView amid crypto market fund flows — BTC price is moving downwards on the 1-hour chart. Source: BTC/USDT on TradingView.com

Ethereum on the other hand has also reclaimed its price above $2,400 trading at $2,448, at the time of writing. The current trading price marks an increase from its 24-hour low of $2,171.

Featured image created with DALL-E, Chart from TradingView

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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