Bitcoin has recently experienced substantial outflows, while altcoins such as Ethereum, LIDO, and XRP have seen an increase in investments. According to the latest Digital Asset Fund Flows Weekly Report, Bitcoin faced outflows totaling $621 million, marking the largest withdrawal since March 22, 2024.
Bitcoin’s Decline
The decline in Bitcoin’s value can be attributed to the unexpectedly stringent stance taken by the Federal Open Market Committee (FOMC) during their recent meeting. Investors responded to the FOMC’s dot plot by reducing their holdings in assets with a limited supply, like Bitcoin. This cautious sentiment was further evidenced by the $1.8 million inflows into short-Bitcoin positions, indicating growing skepticism about Bitcoin’s short-term prospects.
Altcoins See Positive Inflows
In contrast to Bitcoin’s outflows, several altcoins, led by Ethereum, LIDO, and XRP, saw positive inflows. Ethereum received $13 million, LIDO $2 million, and XRP $1 million, reflecting a shift in investor confidence towards these digital assets. These inflows suggest that investors are diversifying their portfolios within the crypto space, seeking opportunities beyond Bitcoin.
Market Dynamics and Regional Impact
The total outflows from digital asset investment products amounted to $600 million, with the United States accounting for the majority at $565 million. However, this negative sentiment was not confined to the US alone, as Canada, Switzerland, and Sweden also experienced outflows. Germany was a notable exception, with $17 million in inflows, indicating a divergence in regional market sentiments.
Trading Volumes and Assets Under Management
The report also highlighted that trading volumes remained lower at $11 billion for the week, compared to the $22 billion weekly average for the year. Despite this decrease, volumes were still significantly higher than the $2 billion a week observed last year. Total assets under management (AuM) fell from above $100 billion to $94 billion over the week, reflecting the recent price sell-offs and investor caution.
As the cryptocurrency market continues to evolve, the shift in investment patterns between Bitcoin and altcoins like Ethereum, LIDO, and XRP will be closely monitored by investors and analysts alike.
