- Bitcoin’s recent corrective price actions have been blamed for the lower inflows.
- Genesis Global's liquidation of bankrupt assets led to outflows from GBTC.
Investment funds tied to Bitcoin [BTC]the world's largest cryptocurrency, recorded net outflows last week, ending a seven-week streak of inflows.
Investors are pessimistic about Bitcoin
Institutional investors sold over $900 million worth of Bitcoin last week, according to the latest report from digital asset management firm CoinShares.
The latest exodus impacted Bitcoin-based funds' year-to-date numbers, which still looked impressive with inflows of nearly $12 billion.
Source: CoinShares
Additionally, total assets under management (AuM) fell to $68 billion, a significant decline of 8.8% from the previous week.
Note that assets under management are considered an important performance gradient of a fund. Higher assets under management generally result in higher investments.
Exploring the “why” of it all
According to CoinShares, Bitcoin's recent price correction, which saw it lose almost 10% of its value, has made investors cautious. As a result, there were significantly lower inflows into the newly launched spot ETFs in the USA
In fact, new issuers made a net purchase of about $1.1 billion worth of Bitcoin last week, nearly half of the total outflows from the incumbent Grayscale Bitcoin Fund (GBTC).
This represented the largest difference between the two cohorts since they were listed in early January.
Bloomberg ETF analyst Eric Balchunas said last week that GBTC's outflows were primarily due to Genesis Global's liquidation of bankrupt assets.
He reiterated that Genesis was simply buying back GBTC shares to allocate to the new spot ETFs, which he described as a “net neutral event.”
Read Bitcoins [BTC] Price prediction 2024-25
A testimonial from other altcoins
In addition to Bitcoin, investment products linked to other top cryptocurrencies also experienced significant outflows.
While the funds are tied to Ethereum [ETH] Solana experienced $34 million worth of sell-offs [SOL]-related funds recorded net outflows of 5.6 million. Interestingly, the rest of the cryptocurrency space performed relatively well, recording $16 million in inflows.
Next: Grayscale's Bitcoin selling pressure is expected to ease within three months at the current rate
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