The crypto market is undergoing a significant correction as investors withdrew $584 million from crypto-related investment products last week, according to CoinShares’ latest report.
Additionally, global trading volumes for crypto ETPs hit their lowest levels since the US Securities and Exchange Commission approved the launch of several spot Bitcoin exchange-traded funds (ETFs) in January, totaling just $6.9 billion for the week.
This decline continues a trend from the previous week, where investors pulled out around $600 million, bringing the two-week total to nearly $1.2 billion in outflows.
James Butterfill, the head of research at CoinShares, commented:
“We believe this is in reaction to the pessimism amongst investors regarding the prospect of interest rate cuts by the FED this year.”
Bitcoin and US lead outflows
Bitcoin investment products saw the most significant outflows, totaling $630 million. Bitcoin ETPs experienced six consecutive days of outflows in the US, primarily from Grayscale Bitcoin ETF and Fidelity’s FBTC.
Canada also witnessed substantial outflows from crypto ETPs, with $109 million withdrawn. This was followed by Germany and Hong Kong, which saw outflows of $24 million and $19 million, respectively.
Conversely, Switzerland and Brazil recorded inflows of $39 million and $48.5 million, respectively, helping to offset the overall outflows.
Investors with bearish sentiments also withdrew about $1.2 million from short Bitcoin products.
Meanwhile, Ethereum joined the outflow trend, seeing its first withdrawals in weeks, totaling approximately $58 million. This reduced its month-to-date flow to around $23 million from $82 million.
Altcoins prove attractive
Despite the outflows from the major digital asset, multi-asset investment products and some altcoins saw significant inflows.
According to CoinShares, multi-asset products attracted over $98 million, while Solana, Litecoin, and Polygon received $2.7 million, $1.3 million, and $1 million, respectively.
Butterfill explained that these inflows indicate a new investor focus on altcoins. He stated:
“[These inflows] suggest investors view the weakness in the altcoin market as a buying opportunity.”
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