• CoinShares data show crypto investment products recorded minor outflows of $2 million.
• Bitcoin saw a third straight week of outflows totaling $12 million.
• Short-bitcoin funds saw inflows of $10 million driven by US economic data.
CoinShares Data Show Crypto Investment Outflows
CoinShares asset manager reported that digital asset investment products recorded outflows this past week due to macro data weighing on investor sentiment. Total outflows across crypto-related products was a minor $2 million, with Bitcoin seeing a third consecutive week of outflows totaling $12 million.
Short-Bitcoin Funds See Inflow
In addition to the negative sentiment around BTC price, short bitcoin funds saw inflows of $10 million last week. According to CoinShares, the US Federal Reserve’s hawkish attitude and recent macroeconomic data increased fears amongst investors that led to the large inflows into short investment products. The Producer Consumer Expenditure (CPE) index suggested inflation was still a key headwind, leading Bitcoin price dropping to lows of $22,770 on the Bitstamp crypto exchange before rebounding above $23,400.
Highlights from CoinShares Report
According to CoinShares head of research James Butterfill: „Opinions remain polarised though, with the US seeing outflows totalling US$14m, where recent macro data has increased fears amongst investors that the US Federal Reserve (FED) will be more hawkish than expected.“
Negative Sentiment Drives Short Investing
The negative sentiment towards Bitcoin last week drove investors to bet huge on its price going down, leading to large inflows into short bitcoin funds and further losses for the cryptocurrency’s price. While weekly outflows across crypto-related products remained minor at just over two million dollars, it is clear that investor sentiment is heavily weighted against cryptocurrencies in general and Bitcoin in particular right now.
Conclusion
Investor sentiment towards cryptocurrencies remains largely bearish right now despite continued efforts from institutional players like Grayscale Investments and Fidelity Digital Assets Services LLC which are attempting to drive up demand for digital assets by launching new funds and services aimed at making it easier for investors to gain exposure to them. Despite this activity however, it appears that negative news surrounding economic data such as inflation has had an impact on investor confidence in cryptocurrencies overall leading many investors to bet against BTC specifically this past week through short investments resulting in further losses for the cryptocurrency’s price over time.