Digital asset funds have seen outflows for three consecutive weeks, although the outflow slowed during the most recent week.
After experiencing outflows of $600 million in each of two consecutive weeks, these funds saw an outflow of $30 million during the week that ended June 29, Bloomberg reported Monday (July 1), citing data from CoinShares International.
Despite the slowdown in outflows, the three-week total marks the biggest outflow from digital asset funds since bitcoin exchange-traded funds (ETFs) were approved by the Securities and Exchange Commission in January, according to the report.
Bitcoin ETFs themselves had inflows totaling $10 million during the week ended June 29 after having two weeks of outflows, the report said.
Ether investment products had outflows of $60 million — up from $58 million the previous week and their largest outflows since August 2022, per the report.
The price of ether — which is the second-largest cryptocurrency, behind only bitcoin — leaped in May after the SEC approved an ether ETF, but it has since come down, according to the report.
In a Monday press release announcing the digital asset fund flows data, James Butterfill, head of research at CoinShares, wrote that the data shows signs that “sentiment is turning for bitcoin.”
Crypto firm Bakkt said in May that the SEC’s approval of bitcoin ETFs may lead to increased mainstream adoption of crypto and institutional investors playing a bigger role in the cryptocurrency trading market.
“As evidenced in our trading volumes in Q1, we’ve begun to see positive green shoots in the market and the overall demand environment improving, with more industry activity, higher coin prices and overall higher retail trading volume,” Bakkt President and CEO Andy Main said at the time.
It was reported June 16 that J.P. Morgan Chase said the state of the cryptocurrency market may not be sustainable.
While crypto net inflows were impressive at the time, driven by demand for spot bitcoin ETFs, J.P. Morgan Chase analyst Nikolaos Panigirtzoglou wrote that those inflows might not be entirely made up of new funds coming into the crypto space.
“We believe there has likely been a significant rotation away from digital wallets on exchanges to the new spot bitcoin ETFs,” Panigirtzoglou explained at the time.
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