Recent weeks had many investors feeling the market had finally bottomed out, but that hope was short-lived. As the market continues to slide, crypto funds are experiencing massive capital flight. New figures reveal that nearly $2 billion was pulled from these funds last week. This outflow ranks among the worst periods since 2018, highlighting how severely market sentiment has shifted.
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Billions Flow Out of Funds #
According to data from CoinShares, a global total of $1.9 billion was withdrawn from crypto funds last week. This includes products from major players like BlackRock, Fidelity, Bitwise, and Grayscale.
In just four weeks, $4.9 billion has vanished from crypto funds, accounting for nearly three percent of all assets under management by these funds. James Butterfill, Head of Research at CoinShares, called it the third-largest outflow since 2018.
The majority of the selling came from the United States, where $1.69 billion was withdrawn. Significant amounts of capital also left Germany, Switzerland, Canada, and Sweden. Only Brazil and Australia saw minor inflows.
The asset hit hardest last week was Bitcoin, with $1.27 billion in outflows. However, notably, there was an inflow of $238 million on Friday, which Butterfill suggests could be a tentative sign of recovery.
Ethereum also had a rough week, with $589 million in outflows, primarily from U.S.-based funds. Solana lost $156 million, while XRP was an exception, attracting $89 million in inflows due to a new U.S. exchange-traded fund (ETF).
Bitcoin Continues to Slide #
The massive outflow from crypto funds comes at a time when Bitcoin is once again dropping sharply. Each time the price seems to stabilize, another blow follows. Bitcoin has now dipped below $90,000, its lowest point in seven months. Anyone who bought in during that period is now at a loss.
Since its record high of $126,000 in October, the price has fallen by 29 percent. This brings it close to previous major corrections of 32 and 33 percent. In those past instances, Bitcoin eventually recovered strongly, but that offers no guarantees this time.
The combination of mass outflows from crypto funds and a falling Bitcoin price shows the extent of the uncertainty in the market. The coming weeks will be crucial for restoring confidence.