Digital Asset Funds Experience Three Consecutive Weeks of Outflows

Digital asset funds have been experiencing outflows for three consecutive weeks, with a slight slowdown in the most recent week, according to data from CoinShares International reported by Bloomberg. After two weeks of $600 million outflows, the funds saw a $30 million outflow in the week ending June 29.

This three-week total marks the largest outflow from digital asset funds since the approval of bitcoin ETFs by the Securities and Exchange Commission in January. However, bitcoin ETFs themselves had inflows of $10 million during the same week after two weeks of outflows.

Ether investment products also saw significant outflows of $60 million, the largest since August 2022. The price of ether surged in May after the approval of an ether ETF by the SEC but has since declined.

James Butterfill, head of research at CoinShares, noted that the data indicates a shift in sentiment towards bitcoin. Bakkt, a crypto firm, suggested that the approval of bitcoin ETFs by the SEC could lead to increased mainstream adoption of crypto and greater involvement from institutional investors in the cryptocurrency trading market.

J.P. Morgan Chase expressed doubts about the sustainability of the cryptocurrency market, noting that recent inflows may be driven by a rotation from digital wallets on exchanges to new spot bitcoin ETFs. Despite these concerns, the overall demand environment for crypto appears to be improving.

Overall, the recent trends in digital asset fund flows suggest a complex and evolving landscape for cryptocurrencies, with both challenges and opportunities on the horizon.