Key Takeaways
- The crypto sell-off is owing to fears of a U.S. recession, geopolitical uncertainty, and broader market liquidations.
- US saw the largest outflows, with $531 million, followed by Germany and Hong Kong with $12 million and $27 million, respectively.
- Bitcoin saw outflows totaling $400 million, while ETH outflows stood at $146 million.
Cryptocurrency assets registered significant net outflows totalling $528 million last week, marking the first outflows in a month. This trend, reported by crypto investment firm CoinShares, occurred from July 28 to August 3.
The reason behind the net outflows is cited as a reaction to the fears of a U.S. recession, geopolitical uncertainty, and broader market liquidations. The United States saw the largest outflows, with $531 million, followed by Germany and Hong Kong with $12 million and $27 million, respectively. Conversely, Canada and Switzerland experienced inflows of $17 million and $28 million.
Bitcoin led the outflows, with $400 million exiting investment products, marking the first outflows after five consecutive weeks of inflows. CoinShares’ Head of Research, James Butterfill, highlighted the significant impact of the price correction, noting, “The price correction from Friday’s close saw $10 billion wiped off total ETP AUM.”
Short Bitcoin funds saw their first significant net inflows since June, adding $1.8 million. The U.S. spot Bitcoin exchange-traded products accounted for $80.6 million of the global outflow total, driven by $237.4 million worth of net outflows on Friday, surpassing earlier weekly net inflows.
Ethereum investment products also witnessed substantial outflows, totaling $146 million globally. This figure includes $169.4 million in net outflows from U.S. spot Ethereum ETFs. However, the inflows into new Ethereum ETFs were overwhelmed by $603 million in net outflows from Grayscale’s higher-fee fund, ETHE, bringing the total net outflows since the funds began trading last month to over $500 million.
In response to the market downturn, Switzerland and Canada saw this as an opportunity to add to their digital asset products, resulting in net inflows of $28 million and $17 million, respectively.
Crypto-related equities also continued to see outflows, with $18 million pulled, consistent with outflows from broad tech-related ETFs. Ether, the second-largest cryptocurrency by market cap, posted $146.3 million in outflows, while Solana saw an additional $2.8 million in outflows. However, multi-asset crypto investment products experienced inflows of $18.1 million.
The global crypto market capitalisation has undergone a major correction, falling below $2 trillion to $1.78 trillion. Nearly 18% of the crypto market cap was wiped out in the last 24 hours as Bitcoin briefly touched $49,000. Bitcoin, after losing the $69,000 support on July 29, continued to drop below $50,000 on August 5, reaching its lowest price since February 2024.
According to data from CoinGecko, BTC has fallen −11.76% in the past 24 hours and is now trading at $ 51,300 USD at the time of writing.
