The bitcoin market has witnessed significant changes recently, influenced by macroeconomic factors and changes in investor sentiment. Last week, digital asset investment products saw substantial outflows, which CoinShares attributed to several key economic updates.
These included the release of US CPI data, the Federal Open Market Committee (FOMC) meeting and the Producer Price Index (PPI) figures. These developments appeared to spark a rapid rise in bitcoin's price, briefly pushing it towards the $70,000 mark before a rapid slowdown adjusted the valuation back to around $65,000.
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Market Shifts: btc Faces Major Outflows, While Some Altcoins Attract Investments
So far, this fluctuation in bitcoin price is part of a broader pattern of volatility that has characterized the digital currency market. Last week alone, institutional and retail investors withdrew approximately $600 million from crypto funds, marking a significant pullback.
CoinShares suggests this could indicate a growing trend toward caution, amplified by a “tough stance” at the recent FOMC meeting, which may have encouraged investors to reduce their exposure to volatile assets like cryptocurrencies.
bitcoin, notably the hardest hit, faced outflows totaling $621 million. Despite this, there was a silver lining as altcoins like ethereum, Litecoin and others recorded minor inflows. ethereum led with an increase of $13 million, suggesting divergent investor confidence in altcoins compared to bitcoin.
This scenario presents a mixed view in which bitcoin struggles under selling pressure while some select altcoins gain marginal traction. Meanwhile, the overall impact on the market has been palpable: Total assets under management fell from more than $100 billion to $94 billion in one week.
Trading volumes also fell significantly from their annual average, indicating a cautious approach by traders across the board. Regionally, while the United States saw the brunt of outflows, countries like Germany saw inflows, suggesting a mixed global response to the current economic climate.
bitcoin ETFs See Mixed Fortunes
Despite a steady rise in overall net inflows to US spot bitcoin exchange-traded funds (ETFs), which reached $15.11 billion in recent weeks, the sector saw a slowdown last week with a net outflow of $190 million per day, according to btc-spot” target=”_blank” rel=”nofollow”>data by SoSoValue.
In terms of market performance, bitcoin's value decreased sharply, reaching a low of $65,398 last Friday. However, as of today, the price of bitcoin has recovered slightly to $65,552, although it still shows a drop of 1.1% in the last day and 5.5% during the week.
Speaking about bitcoin spot ETFs, BlackRock Chief Investment Officer Samara Cohen has bitcoin-etfs-are-on-slow-adoption-journey-says-blackrock-exec.html” target=”_blank” rel=”nofollow”>observed a gradual but steady interest in them despite their slower than expected adoption.
According to Cohen, currently, the majority of bitcoin ETF transactions, approximately 80%, are carried out by “self-directed investors” using online brokerage platforms.
Cohen added that iShares bitcoin Trust (IBIT) is one of the ETFs launched this year, attracting the attention of individual investors and hedge funds and brokerages, as indicated in recent 13-F filings.
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However, participation by registered investment advisors remains comparatively low, Cohen commented during the recent crypto Summit.
Featured image created with DALL-E, TradingView chart
