The focal point of this flight was Bitcoin, which saw outflows of $319 million.
Last week saw large withdrawals from digital asset investment products, with $305 million leaving the market overall.
The trend reflects a broader wave of negative sentiment that has gripped the cryptocurrency market across various regions and providers, CoinShares said in a recent report.
Stronger-than-expected US economic data appears to be the main driver of this downturn, which has decreased the likelihood of a 50 basis point interest rate cut by the Federal Reserve.
Bitcoin Products Saw $319M in Outflows
The focal point of this flight was Bitcoin, which saw outflows of $319 million.
Not all products associated with Bitcoin, though, suffered.
$4.4 million in inflows into short Bitcoin investment products, which profit from drops in the price of the cryptocurrency, occurred for the second week in a row.
This is the biggest influx of money for these products since March, suggesting that some investors are placing bets on further drops in the price of Bitcoin.
$5.7 million left the market for Ethereum, the second-largest cryptocurrency by market capitalization, indicating negative sentiment.
Ethereum trading volumes remained flat, coming in at only 15% of what was seen during the week of the U.S. ETF launch.
According to CoinShares, digital asset investment products saw a total net outflow of $305 million last week. Bitcoin saw outflows of $319 million. Ethereum saw outflows of $5.7 million, with trading volume stagnating. Solana saw inflows of $7.6 million. Blockchain stocks saw…
— Wu Blockchain (@WuBlockchain) September 2, 2024
However, Solana, a blockchain platform renowned for its lightning-fast transactions, defied the trend and brought in $7.6 million.
Interestingly, despite the general negative sentiment, blockchain stocks—especially those associated with Bitcoin mining—persisted. There were $11 million inflows into these stocks.
The majority of these withdrawals, $318 million, came from digital asset products in the United States.
Less significant but still noteworthy outflows of $7.3 million and $4.3 million, respectively, were also seen in Germany and Sweden.
Switzerland and Canada, on the other hand, were able to draw in a little sum of $5.5 million and $13 million respectively, providing a small offset to the general downward trend.
Bitcoin Closes the Week Down by 10%
Significant price changes in the main cryptocurrencies occurred during the week as well.
With a closing value of roughly $57,300, Bitcoin saw a 10.8% decrease from the previous week’s close of roughly $64,220.
Throughout the week, there were swings in the price of Bitcoin, with a notable decline on Tuesday and another on Sunday.
Net withdrawals from Bitcoin spot ETFs totaling about $277 million coincided with the declining trend.
Ethereum had a difficult week as well, ending the week at about $2,425—a decrease of 11.7% from the close of the previous week.
Ethereum spot ETFs saw relatively moderate outflows of $12.6 million despite the price decline, with some new products even seeing net inflows.
Notably, Friday was the first day since ETHe is conversion that saw no outflows, indicating that the pattern of significant outflows may be coming to an end and possibly opening the door for net inflows in the upcoming weeks, according to a recent note from Matteo Greco, a research analyst at Fineqia International.
“With summer nearing its end, there could be an uptick in trading activity and demand, potentially reversing the current trend of limited demand for ETH-based financial products, with only 7 out of 28 trading days recording positive inflows.”