- Digital asset outflows hit $528M after four weeks, driven by US recession fears and market liquidations.
- ETP trading volumes dropped to $14.8B, only 25% of market activity, with $10B wiped from total ETP Assets.
- US led outflows with $531M while Germany and Hong Kong followed, Canada and Switzerland saw inflows of $17M and $29M.
Digital asset investment products have experienced significant outflows for the first time in four weeks, with $528 million being withdrawn. Renowned crypto journalist Colin Wu through Wu Blockchain X post highlighted these findings. This downturn is attributed to escalating fears of a US recession, geopolitical uncertainties, and broader market liquidations across various asset classes.
As per a recent report, last week, trading volumes in Exchange-Traded Products (ETPs) totaled $14.8 billion, representing a lower-than-average 25% of the total market activity. The pull back from the closing price on Friday erased $10 billion in the total ETP Assets under Management (AuM). This significant decline underscores the volatility currently affecting digital asset markets.
According to the breakdown of the amounts by region, the United States of America faced the largest losses at $531 million. Germany and Hong Kong also recorded net sales worth $11.6 million and $27.4 million, respectively.
On the other hand, others like Canada and Switzerland used the weakness in the price to build their stakes, pumping in $17.1 million and $27.8 million. Such regional disparity shows that the investors’ sentiment and the way and the approaches they employ differ depending on the market situation.
Bitcoin saw outflows amounting to $400 million, marking the first outflow after five consecutive weeks of inflows. Short-bitcoin, however, witnessed its first measurable inflows since June, totaling $1.8 million. This shift indicates a growing number of investors hedging their bets against further declines in Bitcoin’s price.
Ethereum was not spared from the outflows, losing $146 million. Since the launch of the Ethereum ETF in the US, net outflows have reached $430 million. This figure conceals the positive inflows of $430 million from newly launched US ETFs, offset by $603 million in outflows from the incumbent Grayscale trust. Minor outflows were also recorded in European ETPs, reflecting a broader cautious sentiment among Ethereum investors.
The platform highlighted that blockchain equities continued to see outflows, with an additional $18 million withdrawn last week. This trend aligns with outflows from broader tech-related ETFs, suggesting a widespread retreat from tech investments amid economic uncertainties.
The reported outflows suggest that the market macros are highly sensitive to macroeconomic influences, especially those related to digital assets. Investors are preparing for a volatile market by rebalancing their portfolios with geopolitical risks and recession concerns emerging on the horizon.
