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Crypto Investors Sour on Bitcoin Funds After Massive Inflows, Turn Instead to Ether and XRP
Digital asset investment products recorded outflows last week for the first time since mid-June, CoinShares reported.
Updated Jul 24, 2023, 6:57 p.m. Published Jul 24, 2023, 3:54 p.m.
Bitcoin (BTC) investment products suffered a $13 million outflow last week, bucking the trend of consecutive weeks of massive inflows as investors instead favored funds focusing on smaller cryptocurrencies such as ether (ETH) and Ripple’s XRP, crypto asset manager CoinShares reported Monday.
Digital asset funds overall witnessed weekly outflows of $6.5 million after gaining $742 million of inflows through the previous four weeks.
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The trend reversal came as BTC investors have seemingly run out of positive news to bid on after some major catalysts in recent weeks. Global asset management giant BlackRock filed for a long-coveted spot BTC exchange traded fund on June 15, followed by a swarm of competitors renewing their applications. The BlackRock news spurred investors to pile money into BTC-focused investment funds over the next month at the fastest pace since October 2021.
XRP’s partial court victory over the U.S. Securities and Exchange Commission (SEC) earlier this month sent BTC’s price to a fresh yearly high, before its price quickly reverted below $30,000. The ruling, however, improved investor confidence in altcoins – alternative crypto assets to BTC – which was underscored by positive fund flows through last week.
ETH-focused investment products enjoyed the largest inflows among all cryptocurrencies, totaling $6.6 million. The growth suggests that “sentiment, which has been poor this year, is beginning to turn around” for the second largest crypto asset, noted James Butterfill, head of research at CoinShares.
XRP funds experienced $2.6 million of inflows, totaling $6.8 million, or 8% of all assets under management inflows, over the last 11 weeks. “This implies investors are increasingly confident in the outlook for XRP,” Butterfill said.
Funds holding smaller altcoins such as Solana’s SOL, UniSwap’s UNI and Polygon’s MATIC witnessed positive flows of $1.1 million, $0.7 million and $0.7 million, respectively.
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