“Other than the hawkish language from the US Federal Reserve and the recent price decrease, it is impossible to discern the specific cause for this,” CoinShares noted. Last week, institutional investors sold $133 million worth of Bitcoin (BTC) investment products, the most in a single week since June of last year.
The overall digital asset fund outflows for the week ending on Friday reached $120.1 million. Large Bitcoin withdrawals were somewhat offset by unexpected $38 million in FTX Token (FTT) product inflows. Last week’s withdrawals from BTC funds were $132.7 million, bringing the month-to-date outflows for April to $310.8 million. The last time BTC funds witnessed this much outflow in a single week was in June 2021, during a severe negative trend, because of huge FUD in the news, such as Tesla suspending BTC payments for its automobiles due to environmental concerns and China enacting its crypto mining ban.
What are the driving forces?
In the research, data showed that there does not appear to be a solid signal as to why a similar degree of adverse investment sentiment revived last month, although it did point to a few possible factors: “Other than the US Federal Reserve’s hawkish language and the recent price decrease, it’s impossible to pinpoint the specific cause for this.” The price of BTC, like many other key assets and stock market indices, has dropped dramatically in the last 30 days, down 18.2 percent to $37,970 at the time of writing. Many observers believe this is due to concerns that inflation and the Federal Reserve’s planned interest rate rises would cause the price of Bitcoin to plummet much more.
Overall, month-to-date (MTD) outflows for all digital asset products were $326.1 million, indicating that institutional investors have been attempting to take risks off the table with crypto investments across the board. Ether (ETH), Bitcoin’s nearest contender for the top slot in crypto, has also been hit by adverse sentiment recently, with outflows totaling $25 million and MTD outflows of $82.3 million in products giving exposure to ETH.