Crypto Funds See Outflows as Bitcoin Gets More 'Interest-Rate Sensitive'
Some $97 million flowed out of digital asset funds in the week through April 15.
Crypto funds had a second straight week of outflows as bitcoin became more sensitive to interest rates and investors adjust to the the Federal Reserve’s hawkish turn, CoinShares reported Tuesday.
Across the industry, crypto funds had $97 million in net outflows in the seven days through Apr. 15, according to CoinShares. Of that, 88% came from European funds in a shift from the prior week when the majority of the $134 million in outflows came from U.S. funds. The $134 million in outflows was the most since January.
“We have witnessed bitcoin becoming increasingly interest-rate ‘sensitive’ over the course of 2022 in a similar way to other stores of value," CoinShares wrote in its report.
So-called "short" bitcoin investment products – such as exchange-traded products that provide an inverse to the cryptocurrency's performance – saw $1.8 million in outflows last week after a few weeks of inflows.
Bitcoin-related products saw outflows of $73 million, claiming the majority of the outflows. Trading volume of bitcoin funds was at half of the yearly average at $651 million, echoing the shrinking overall bitcoin trading volume. It was 32% off the year’s weekly average.
Bitcoin (BTC), the largest cryptocurrency by market capitalization, has traded at around $40,000 since early April. It went up to over $41,000 on Apr. 13, but fell back to $40,000 later in the week.
Funds focused on ethereum (ETH) saw $27 million in outflows, more than the previous week’s $15.3 million in outflows.
Both Cardano and Solana-focused funds saw outflows of $700,000, while multi-asset funds saw inflows of $5.3 million.
Broken down by providers, funds managed by ETC Group had the most outflows with $95.9 million, while 3iQ’s $19.2 million of outflows were the second most.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.