Research Summary

This report discusses the recent outflows in digital asset investment products, which totalled US$168m, marking the largest outflow since the US regulatory crackdown in March 2023. Bitcoin was the primary focus, with outflows of US$149m. The report also highlights the negative sentiment across most geographies, with Germany and Canada experiencing significant outflows. Ethereum was the only altcoin to see measurable outflows.

Key Takeaways

Significant Outflows in Digital Assets

  • Largest outflows since March: Digital asset investment products saw outflows totalling US$168m, marking the largest outflow since the US regulatory crackdown of exchanges in March 2023.
  • Bitcoin as the primary focus: Bitcoin saw outflows last week totalling US$149m, despite net flows remaining positive for the year at US$265m.
  • Continued selling of short positions: Many investors are continuing to sell their short positions, with outflows representing 89% of total assets under management (AuM) over the last 18 weeks.

Negative Sentiment Across Geographies

  • Outflows spread across most geographies: The negative sentiment was broad-based, with outflows spread across most geographies.
  • Significant outflows in Germany and Canada: Germany and Canada, where most of the recent activity has been, saw outflows of US$68m and US$61m respectively.

Altcoin Outflows and Inflows

  • Ethereum sees outflows: Ethereum was the only altcoin to see measurable outflows, totalling US$17m.
  • Minor inflows for XRP and Litecoin: XRP and Litecoin saw minor inflows of US$0.5m and US$0.44m respectively.

Actionable Insights

  • Monitor Bitcoin’s performance: Despite the recent outflows, Bitcoin’s net flows remain positive for the year. Investors should keep a close eye on its performance.
  • Consider geographical trends: With significant outflows in Germany and Canada, investors should consider these geographical trends when making investment decisions.
  • Observe altcoin activity: The outflows in Ethereum and minor inflows in XRP and Litecoin could indicate shifting investor sentiment towards these altcoins.

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