DIGITAL ASSET OUTFLOWS REACH $206M AS INVESTORS WORRY ABOUT INTEREST RATES

Digital asset investment products have seen a withdrawal of $206 million over the past week, marking a continuation of recent outflows.

The 11th consecutive week of net outflows from blockchain equities amounted to $9 million, as per CoinShares data, driven by investor concerns over the latest Bitcoin halving and its implications for mining profitability and the value of related stocks.

The recent halving cut the mining reward to 3.125 BTC, potentially diminishing the profitability of mining operations and impacting the financial health of companies in this sector, as well as their stock values.

Interest in Digital Asset Investments Declines

The total outflows from digital assets investment products reached $206 million for a second consecutive week. Trading volumes in ETPs dropped slightly to $18 billion, making up a reduced share of overall Bitcoin trading volumes, now 28% from 55% a month earlier.

A report by a Singaporean asset manager indicated a waning interest among ETP/ETF investors, likely due to expectations of prolonged high interest rates by the Federal Reserve.

Bitcoin recorded significant outflows of $192 million, though there was minimal activity in short-selling, with outflows from short positions in Bitcoin at just $0.3 million. Ethereum saw its sixth week of outflows totaling $34 million.

Solana-based investment products also experienced a small outflow of $0.3 million, whereas multi-asset investment products saw a rebound with $9 million in inflows.

Litecoin and Chainlink recorded inflows of $3.2 million and $1.7 million, respectively, and Polkadot and XRP also saw positive movements, with inflows of $1.5 million and $1.3 million.

Negative Sentiment in US ETFs

US ETFs were particularly affected by negative sentiment, seeing outflows of $244 million. These were primarily from existing ETFs, though newly issued ETFs continued to attract some capital, albeit at reduced levels. Germany and Sweden also saw outflows totaling $8 million and $6.7 million, respectively.

Conversely, Canada and Switzerland led in inflows with $30 million and $8 million, respectively. Other positive inflows were observed in Brazil, Australia, and France, with $5.5 million, $2.2 million, and $0.2 million, respectively.

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