Recovering Digital Asset Inflows, Slowing ETF Activity

In the past week, there has been a positive increase in digital asset inflows into crypto investment products. Net inflows amounted to $862 million, which is a significant improvement compared to the net outflows of $931 million in the previous week. The popularity of spot Bitcoin exchange-traded funds (ETFs) appears to be declining. The daily trading volume of ETFs has dropped to $5.4 billion, a decrease of 36% compared to its peak of $9.5 billion in the first week of March.

Bitcoin (BTC) has been the top digital asset in terms of inflows, with $863 million. This is largely due to the demand for spot BTC ETFs, which recorded $1.8 billion in inflows. Grayscale, a popular cryptocurrency investment firm, saw $965 million in outflows from their Bitcoin Trust (GBTC). This continuous outflow from GBTC has exerted significant selling pressure on the price of BTC over the past three weeks. Market experts had anticipated that the outflows from GBTC would eventually slow down and result in increased demand for ETFs. Recent investor trends indicate that the outflows from GBTC are ongoing, and they have dominated the ETF flow for the past three weeks.

The selling pressure from ETFs has been evident in the decline of BTC price, which dropped by $4,000 within the last 24 hours and is currently trading slightly above $66,000. Many analysts view this as a routine correction before the upcoming Bitcoin halving event scheduled for April 20. During this price correction, approximately $500 million in liquidation occurred, and the options market experienced a surge in put calls, indicating a bearish sentiment among traders.

Ethereum (ETH) has experienced four consecutive weeks of outflows, with $19 million being withdrawn in the past week. The altcoin market saw a net inflow of $18.3 million, with Solana (SOL) leading the way with $6.1 million in inflows. In terms of regions, the United States recorded the largest outflow in the past week, amounting to $897 million. Europe and Canada combined saw outflows of $49 million.

While there has been a positive turn in digital asset inflows into crypto investment products, the decline in the popularity of spot Bitcoin ETFs is evident. The continuous outflows from Grayscale’s Bitcoin Trust have impacted the BTC price, and the recent correction has led to a bearish sentiment among traders. Ethereum has also experienced outflows, while the altcoin market has seen moderate inflows. The United States has observed the largest outflow regionally, with Europe and Canada also experiencing some outflows.