Crypto exchange funds see bad signal for 2nd week in a row

Last week we wrote that crypto investors using exchange funds are selling their investments again for the first time in six weeks. Bitcoin (BTC) reached the psychological mark of $30,000 that week. Unfortunately, investors seem unconvinced by the uptrend and decided to sell more last week.

Losing crypto funds money by Fed?

In a weekly research report writes CoinShares that investors have caused outflows from the fixed basket of crypto funds for the second week in a row. According to last week’s survey, outflows two weeks ago were about $30 million. Last week, so according to this week’s survey, the outflow totaled $72 million. The capital flight from crypto has therefore even grown.

CoinShares suspects it was caused by investors expecting the Federal Reserve to hike rates again. Judging by the past, that’s bad for risky assets. That interest rate hike also came last night.

Crypto investors pretty straightforward

As usual, Exchange Traded Funds (ETFs) centered around bitcoin had the bulk of the volume, losing $46 million last week. Remarkably enough, the funds that are short on bitcoin and therefore hope for a falling bitcoin price also saw outflows. Since the bottom in December of 2022, the money in these funds has not left as quickly as it did last week. Sentiment is therefore variable, although the motives of these investors cannot be determined with certainty.

Meanwhile, Solana (SOL) and Cardano (ADA) have experienced a small growth. ‘Small’ is the key word in this, because the growth is only 200,000 and 100,000 dollars. If you take into account that growth was also extremely limited last month, it is conceivable that this gain could disappear quickly, if it came down to it.

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CoinShares also emphasizes that Germany is now a major source of the outflows. No less than USD 40.3 million left our neighboring country, while Germany was one of the few to have a positive attitude last time (two weeks ago). Last week, all countries were net sellers except Australia. Investors in Australia bought USD 300,000 in additional coins.

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