Institutional investors shed $133 million worth of Bitcoin investment products last week, marking the largest week of outflows since June last year, as Bitcoin’s price tumbles below $38,000 over fears of the impending U.S. Federal Reserve’s interest rate hike.
According to CoinShares’ weekly Digital Asset Fund Flows report, the overall digital asset fund for last week, resulted in a decline of $120.1 million, with the large Bitcoin sell-off marginally offset by a surprise $38 million worth of purchase for FTX’s native token, the FTT Token products.
The $132.7 million worth of sales from BTC funds last week, brings the month-to-date (MtD) sell-offs for April to $310.8 million. We also saw selloffs from Ethereum products which amounted to $25.1 million. The MtD performance for Ethereum based products currently stands at $82.3 million.
What you should know
- The last time BTC funds saw this level of selloffs in a single week was during a strong bearish trend in June 2021 as a result of major FUD caused by news of Tesla halting BTC payments for its cars over environmental concerns and China rolling out its crypto mining ban.
- CoinShares noted in the report that there doesn’t appear to be a strong indicator of why a similar level of bearish investment sentiment had resurfaced last month but did point to a couple of potential factors.
- The report stated, “It is difficult to ascertain the precise reason for this other than the hawkish rhetoric from the US Federal Reserve and the recent price decline.”
- Like many other top assets and various stock market indexes, the price of BTC has suffered significantly, especially in the month of April, where the leading crypto declined by over 17% in the month, to the end trading at $37,714.88.
- Many onlookers attribute this to fears that inflation and the Federal Reserve’s upcoming interest rate hikes will see the price of BTC tank further.
- Overall, the overall month-to-date (MTD) outflows for all digital asset products tracked by CoinShares totalled $326.1 million, suggesting that institutional investors have been looking to take risk off the table across the board with crypto investments.
- CoinShares wrote, “This doesn’t reflect the same bearishness seen at the beginning of this year, although it is close to the US$467m outflows witnessed. Regionally, the outflows were fairly evenly split between The Americas comprising 41% and Europe 59%.”
On the other end of the spectrum, funds tied to crypto exchange and NFT platform FTX’s FTT saw $38 million worth of inflows, but as FTT funds are categorized under “other,” it is unclear if this is part of a longer trend. Notably, the price of FTT is down 24.5% over the past 30 days also. Terra (LUNA) and Fantom (FTM) investment products also saw minor inflows of $390,000 and $250,000 each.