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Digital Asset Investment Products Experience Second Consecutive Week of Outflows, Totaling $206M

Digital asset investment products saw another week of outflows, making it the second consecutive week of decreasing investor interest.

According to a report from CoinShares, the outflows totaled $206 million, while trading volumes in Exchange Traded Products (ETPs) slightly declined to $18 billion.

Bitcoin investment products accounted for outflows of $192 million. Nonetheless, the report noted that some investors saw this as a chance for short-selling, as short-Bitcoin strategies experienced outflows of $0.3 million.

Trading Volumes in ETPs Continue to Drop

The proportion of trading volumes in ETPs relative to total bitcoin volumes has shrunk, now standing at 28%. This marks a substantial decline from the 55% reported just a month ago.

The data suggests waning interest among ETP/ETF investors, potentially influenced by expectations of prolonged high interest rates set by the Federal Reserve (FED).

The pessimistic sentiment surrounding digital asset investment products was predominantly observed in US ETFs, which experienced outflows totaling $244 million.

These outflows primarily targeted existing ETFs, while newly issued ETFs continued to receive inflows, albeit at reduced levels compared to previous weeks.

In contrast, Canada and Switzerland enjoyed inflows of $30 million and $8 million, respectively, whereas Germany witnessed minor outflows of $8 million.

Meanwhile, Ethereum endured outflows of $34 million for the sixth consecutive week.

On a brighter note, multi-asset products experienced improved sentiment, attracting inflows of $9 million during the previous week.

Additionally, Litecoin and Chainlink received inflows of $3.2 million and $1.7 million, respectively.

In the realm of blockchain equities, concerns regarding the impact of halving continued to dampen investor sentiment.

As a result, blockchain equities faced their eleventh consecutive week of outflows, totaling $9 million.

Bitcoin Surges After Halving

While Bitcoin initially showed little reaction to the highly anticipated halving event, the leading cryptocurrency has since recorded some gains.

Currently, Bitcoin is trading at $66,266, marking an increase of nearly 2% over the past day, as per data from CoinMarketCap.

Despite warnings from analysts, such as JPMorgan, about a potential further decline in price following this quadrennial event, the overall consensus remains bullish in the long term.

Recently, Bitwise stated that while the month immediately following the halving typically witnesses a modest price drop, the subsequent year often sees exponential gains.

The asset manager highlighted that following the 2012 halving, Bitcoin saw a meager 9% increase in the month post-halving, only to surge by an astounding 8,839% over the following year.

Similar trends were observed after the 2016 and 2020 halvings, with Bitcoin’s price experiencing significant surges in the year following each event.

Similarly, Crypto.com CEO Kris Marszalek recently mentioned that Bitcoin might face some selling pressure leading up to the highly anticipated halving event, but the long-term outlook remains bullish.

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