Market Overview and Regional Disparities
Global cryptocurrency-based investment products experienced an unprecedented outflow of $2 billion last week, marking the most significant weekly withdrawal of the year. The sell-off was driven by the U.S., where investors shied away due to uncertainties in monetary policy and local whale selling activity. While Bitcoin and Ethereum saw major outflows, Germany stood out positively against the overall negative market sentiment.
According to CoinShares’ 260th weekly report, investors based in the U.S. accounted for a staggering 97% of the global outflow with $1.97 billion withdrawn. Switzerland and Hong Kong reported exits of $39.9 million and $12.3 million, respectively. Meanwhile, German investors capitalized on lower prices, resulting in inflows of $13.2 million. This scenario clearly illustrates the regional disparity in investment behaviors.
The report highlights the decline in the total assets under management (AuM) for crypto-based investment products, which fell from a peak of $264 billion at the beginning of October to $191 billion, marking a 27% decrease in the past six weeks. Analysts attribute this downturn to uncertainty around Federal Reserve interest rate policies and significant investor sell-offs.
Specific Asset Performance and Investor Strategy Shifts
Last week saw withdrawals of $1.38 billion from Bitcoin-based investment products and $689 million from Ethereum. These figures correspond to 2% and 4% of total assets in Bitcoin and Ethereum, respectively. In contrast, Solana and XRP faced relatively smaller outflows of $8.3 million and $15.5 million. Meanwhile, Litecoin, Sui, and Cardano experienced inflows of $3.3 million, $6 million, and $400,000, respectively.
Simultaneously, investors are moving away from the volatility of individual assets towards multi-asset-based investment products, which saw a $69 million inflow over the past three weeks. There was also an increase in short Bitcoin positions during this period. The trend indicates a shift towards risk hedging strategies among investors. Experts believe that despite the short-term selling pressure, these movements might support market equilibrium in the medium term.