Digital asset investment products experienced minor outflows of $126 million in the past week as investors showed hesitancy due to a stalled positive price momentum. While trading volumes increased slightly from $17 billion to $21 billion on a week-on-week basis, activity in exchange-traded products (ETPs) and exchange-traded funds (ETFs) dropped relative to the overall market, according to a CoinShares report. Bitcoin saw outflows of $110 million but maintained positive inflows of $555 million month-to-date. Ethereum had outflows of $29 million last week, marking its fifth consecutive week of outflows. Altcoins like Decentraland, Basic Attention Token, and LIDO attracted inflows amidst the cautious sentiment among investors. Regionally, investors in the United States recorded the largest outflows, while investors in Germany viewed recent price weakness as an opportunity and injected $29 million in inflows last week. Overall, investors poured a total of $646 million into crypto products, pushing year-to-date inflows to an unprecedented $13.8 billion.
Bitcoin experienced a 2.8% surge over a 24-hour period, reaching a trading value above $66,500, while ether (ETH) advanced to $3,240 after multiple issuers in Hong Kong announced approval for spot crypto ETFs. China Asset Management, Bosera Capital, and other applicants shared the news of their approval to list spot Bitcoin and Ether ETFs in Hong Kong. Analysts predict mainland Chinese investors could invest up to $25 billion in potential Hong Kong-listed spot Bitcoin ETFs through the Southbound Stock Connect program, which allows qualified mainland Chinese investors to access eligible shares listed in Hong Kong. However, a notable outflow of Bitcoin from miners could be on the horizon following the upcoming halving event. Markus Thielen, the head of research at 10x Research, estimated that Bitcoin miners could liquidate approximately $5 billion worth of BTC after the halving, leading to potential sideways movement in Bitcoin’s price for four to six months.
The cautious sentiment among investors reflects their wariness of current market conditions and the uncertain trajectory of digital assets. Last week, investors poured a total of $646 million into crypto products, pushing the year-to-date inflows to an unprecedented $13.8 billion and surpassing the previous year’s total of $10.6 billion. Bitcoin was the primary focus for investors, with inflows totaling $663 million. While ETP/ETF activity accounted for 40% of total volumes on trusted exchanges over the past month, it dropped to 31% last week, indicating the cautious approach adopted by investors. Investors in the United States recorded the largest outflows, totaling $145 million, while investors in Germany viewed recent price weakness as an opportunity and injected $29 million in inflows last week.
Overall, digital asset investment products saw minor outflows of $126 million last week, with Bitcoin experiencing outflows of $110 million and Ethereum suffering on a relative basis with outflows of $29 million. Despite this, altcoins had a successful week, with lesser-known names like Decentraland, Basic Attention Token, and LIDO attracting inflows. The surge in Bitcoin and ether prices following the approval of spot crypto ETFs in Hong Kong is significant, as analysts predict substantial investment from mainland Chinese investors through the Southbound Stock Connect program. However, a potential outflow of Bitcoin from miners following the halving event could lead to sideways movement in Bitcoin’s price for four to six months. Investors remain cautious due to the uncertain market conditions and the ongoing price weakness in digital assets, but overall inflows into crypto products have been strong, surpassing previous year totals.
