FX168 Financial News (North America) News Global cryptocurrency funds have seen outflows for the second week in a row, indicating a decline in demand for cryptocurrency exchange-traded funds (ETFs).
(Source: Bloomberg)
According to the latest report by CoinShares International Ltd., this phenomenon is partly due to the market's general expectation that the Federal Reserve's interest rate will remain high for a long time.
In the week ending April 19, total outflows from global cryptocurrency funds reached US$206 million. In the US in particular, ETF funds have suffered a divestment of US$244 million, mainly focusing on fund products already in the market. Although newly issued ETF products still have capital inflows, the deposit amount is already significantly lower than the level of previous weeks.
CoinShares analyzed in the report that this investor behavior may reflect concerns that the Federal Reserve may maintain high interest rates for a long time.
According to the report, the US spot Bitcoin ETF began trading after receiving approval from the US Securities and Exchange Commission earlier this year, with an outflow of $192 million this week. Analysts pointed out that the market's reaction to this new product shows that investors are not interested in using this tool to short Bitcoin. “But few investors see this as an opportunity to go short”.
As of 3 p.m. Vancouver time, the price of Bitcoin rose 2.63% to $66,653.21.
After Bitcoin was halved last Friday, related concept stocks generally rose on Monday. After J.P. Morgan confirmed its overrated rating and is confident that it will still be the leader in Bitcoin concept stocks, Bitcoin mining company Riot Platforms closed up 23.11%, MicroStrategy, the listed company that holds the most Bitcoin, closed up 12.77%, and Coinbase, the largest cryptocurrency exchange in the US, rose more than 7%.
Prior to that, there were capital outflows from crypto-related stocks for the 11th consecutive week, totaling $9 million. Analysts believe this reflects market concerns about the possible negative impact of the cryptocurrency halving event on mining companies.
On the other hand, funds holding Ethereum also experienced capital outflows for the sixth week in a row, with a total outflow of 34.2 million US dollars this week.
Furthermore, the report also mentioned the long-term impact of Bitcoin's “halving” on the market. This event occurs every four years to halve the amount of newly generated bitcoins, thereby affecting miners' earnings. Although the halving may have a boosted effect on Bitcoin's price, its direct impact on mining operations still makes many investors uneasy.
Overall, although some ETF products are still seeing inflows, continued outflows from cryptocurrency funds and related stocks suggest that the market is cautious about the cryptocurrency environment in the coming months.