Cryptocurrency Investment Products Experience Decreasing Inflows, Grayscale Leads Despite Outflows

Inflows into the Newborn Nine ETFs fell by more than 50% during the past week to $126 million from $254 million, according to CoinShares weekly report. This reduction in inflows contributed to the third consecutive week of outflows totaling $435 million—the largest outflow since March—for major crypto-related investment products.

Grayscale’s GBTC remains a significant contributor to these outflows, with $440 million exiting the product last week. Despite this, it marks GBTC’s lowest weekly outflow in nine weeks, indicating a deceleration in outflows. However, the total outflows from GBTC on a year-to-date basis have surpassed $17 billion.

James Butterfill, CoinShares head of research, noted that while Grayscale’s outflows are slowing down, there has also been a decrease in inflows from new issuers. Last week, new issuers saw only $126 million in inflows compared to $254 million the previous week. This weakening inflow trend has also led to a decline in trading volume, dropping to $11.8 billion from $18 billion.

Major ETF issuers like BlackRock and Fidelity recorded several days of zero flows last week, signaling a potential waning interest from investors in the asset class.

On the other hand, investment products related to altcoins such as Solana, XRP, Cardano, Polkadot, and Chainlink saw inflows last week, totaling more than $25 million. However, Ethereum continued its outflow trend, experiencing an additional $38.4 million in outflows last week, bringing the total for the month to $123.8 million. The year-to-date flow for Ethereum remains negative at $50 million.

Despite the prevailing bearish sentiments in the market, some investors have added $1.3 million to short Bitcoin investment products, indicating a growing interest in betting against the cryptocurrency.