Amidst a rollercoaster ride in the world of cryptocurrencies, the past week witnessed a tumultuous trend as asset outflows reached a significant $59.3 million between September 3 and 9. This unsettling pattern has now snowballed into a substantial $249 million over the course of four consecutive weeks. The focal point of this crypto turbulence was undeniably Bitcoin, the market’s flagship cryptocurrency, which experienced a massive $68.9 million in outflows. Interestingly, these Bitcoin outflows were somewhat counterbalanced by Short Bitcoin inflows totaling $15.2 million and a modest $0.7 million influx from XRP.
According to experts at CoinShares, the primary culprits behind this sustained slump are regulatory uncertainties and a strengthening U.S. dollar. Trading volumes also plummeted by 73% compared to the prior week, dwindling to just $754 million for the week.
We believe continued worries over regulation of the asset class and recent dollar strength are the most likely reasons for this. Trading volumes also dropped significantly, by 73% in comparison to the prior week to just US$754 million for the week.
Solana, once the darling of investors with nine consecutive weeks of inflows totaling $14.1 million, saw a surprising reversal of fortunes, with $1.1 million in outflows. Ether, often considered Bitcoin’s closest rival, witnessed outflows of $4.8 million for the week, further solidifying its reputation as the “least loved digital asset amongst ETP investors this year,” with year-to-date outflows totaling $108 million.
Source: CoinShares
On the global stage, the cryptocurrency market showed intriguing geographic variations. Brazil emerged as a standout with modest inflows of $0.1 million. However, the spotlight remained on Germany, Canada, and the United States, where crypto investors led the charge in outflows, tallying impressive figures of $20 million, $17.6 million, and $12.3 million, respectively. Meanwhile, Switzerland and Sweden encountered their fair share of turbulence, grappling with significant outflows of $7.4 million and $2.3 million, respectively.
Industry experts are now predicting a continuation of Bitcoin’s downward trajectory, with some even speculating that the coin may plummet to as low as $20,000. This pessimistic sentiment could further exacerbate outflows, as the ongoing four-week trend suggests that altcoins are unlikely to disrupt the current balance of flows.