Crypto Market Sees $21M Outflow, Trading Volumes Surge Amid ETF Inflows

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Outflows from Institutional Crypto Products

In the past week, institutional investors have withdrawn 21 million US dollars from the cryptocurrency market. This represents a sharp reversal from the inflows of 1.18 billion US dollars the previous week. Despite the small outflows, the digital asset market has seen inflows of 1.3 billion US dollars since the beginning of the year.

Rising Trading Volumes and Declining Assets Under Management

The outflows were accompanied by a significant increase in trading volumes, which totalled 11.8 billion US dollars. This is seven times more than the average weekly trading volume throughout the year 2023. In addition, the total assets under management (AuM) fell to 52.2 billion US dollars, a drop of almost 5% from the previous week.

Massive Outflows at Grayscale

A lot of activity came from the approximately twelve Bitcoin [BTC] Spot ETFs that were approved for trading in the US at the beginning of the month. Newly introduced ETFs received inflows of over 4.13 billion US dollars, while the “established, higher fee issuers” recorded almost 3 billion US dollars in outflows.

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The Grayscale Bitcoin Trust, which has now been converted into a spot ETF, charges the highest management fees among all ETF providers at 1.5%. Most of the approved ETFs have fees between 0.2% and 0.4%. Because of this, many investors have redeemed their GBTC shares in favour of Bitcoin and started to realise profits, leading to selling pressure.

Main Crypto Assets Suffer

Bitcoin, the largest institutional crypto product, recorded outflows of 25 million US dollars in the past week. However, the total capital inflows for the year were an impressive 1.27 billion US dollars. Since the introduction of the ETFs on January 11, the king of coins has fallen by 16%, which is attributable to sales by GBTC investors.

Other top coins such as Ethereum [ETH] and Solana [SOL] also recorded significant outflows of 14.5 million US dollars and 8.5 million US dollars respectively. Like Bitcoin, these coins have suffered significant market value losses in recent days. The total market capitalisation of all circulating cryptos fell by 7.6% in the past week.

Sources: CoinShares, CoinMarketCap

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Last update: 19. February 2024

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