Crypto Investors Withdraw Hundreds of Millions Amid Interest Rate and Geopolitical Concerns
Crypto investors are pulling out hundreds of millions from digital asset products for the second consecutive week, citing concerns over interest rates and geopolitical turmoil. According to a report from CoinShares, digital asset investment products experienced $206 million in net outflows last week, with withdrawals primarily seen in U.S. ETFs and financial vehicles backed by Bitcoin (BTC).
Global ETP trading volumes also saw a decline from $21 billion to $18 billion, although total BTC trading activity continued to rise. The report highlighted that a month ago, ETFs accounted for 55% of all Bitcoin trading, but this number has since dropped to around 28% due to macroeconomic factors.
“The data suggests appetite from ETP/ETF investors continues to wane, likely off the back of expectations that the FED is likely to keep interest rates at these high levels for longer than expected,” the CoinShares report stated.
While U.S. ETFs saw $244 million in outflows and BTC experienced over $192 million in withdrawals, bearish investors did not anticipate lower market prices. Instead, they deployed significant capital to short positions and products, with short-Bitcoin funds noting around $300,000 in outflows.
On the other hand, crypto proponents showed little demand for Ether and blockchain stocks. Ethereum continued its six-week outflow streak, with another $34 million pulled out. The price of Ether remained relatively flat over the past week, with only a 0.30% change noted by CoinMarketCap.
Blockchain equities also saw $9 million in outflows, marking an 11th successive week of weakened investor confidence in the crypto sector. Analysts at CoinShares pointed out that investors are particularly concerned about the impact of Bitcoin halving on BTC mining entities.
As the crypto market continues to navigate through uncertain times, investors are closely monitoring developments in interest rates and geopolitical events that could further impact digital asset investments.
