Outflows Rock Bitcoin As Institutional Investors Pull The Plug, More Downside Coming?

Since the crash in the value of Bitcoin, outflows were the norm. Massive sell-offs occurred in this space due to the same sentiment spreading through institutional as well as individual investors. Even though bitcoin prices have been rising in recent weeks, the outflows of Bitcoin have been increasing over the last week.

Bitcoin: $453 Million

Bitcoin was experiencing a trend reversal, with more inflows than usual the week before. This trend was short-lived, however. Outflows continued to rock this digital asset. CoinShares has reported that bitcoin was leading the outflow trends for the last week. The net outflows were $453 millions. This outflow is among the largest ever recorded and wipes out most inflows for digital assets on a calendar year basis.

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This comes as bitcoin’s price had continued to fluctuate around $20,000 over the last week. The market had been expecting that lower prices would lead to more investors, but it has actually the reverse. Total assets under management (AuM), bitcoin, is now at $24.5 Billion. This is the lowest level in over a year. 

Bitcoin price chart from TradingView.com

BTC recovres above $21,000 | Source: BTCUSD on TradingView.com

This week’s inflows were the main focus of its short-bitcoin counterpart. It is believed that the $15 million inflows were due to the launch of the US’ first short investment product. The launch is certain, considering that other short-bitcoin investing products experienced outflows during the same time period.

Inflows to Ethereum were also seen for the first time in three months. After 11 weeks of outflows, it was $11 million that poured into altcoin.

North American Outflows Get Worse

Outflows were restricted to a specific area, which is North America’s corner of the market. CoinShares reports that the vast majority of outflows were from Canadian exchanges. One provider was specifically responsible for the outflows. The majority of outflows were seen 17 June, but they did not appear until the last week. It shows that these sell-offs had been a trigger for bitcoin’s decline to $17,700.

Read Related Reading| Crypto Liquidations Settle As Bitcoin Recovers Above $21,000

The outflows of digital asset investments products were also large, with $423 Million leaving the market. This is a record in the area. These outflows, however, were not due to trades being updated late by Canadian exchanges. These outflows will be removed from the system and shown to correspond with their time periods.

Record outflows occurred last year at the beginning of the year, when $198m had left the market within a week. The last week’s outflows exceeded that by over 100%. However, the asset under management ratio remains lower than in 2018, when outflows were as high as 1.6%. 

Featured image taken from MARCA. Chart from TradingView.com

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