On March 6, the European cryptocurrency investment firm CoinShares published its “Digital Asset Fund Flow Report”, which revealed that investors have continued to display negative sentiment towards cryptocurrency investment products, with withdrawals amounting to as much as $17 million.
Negative sentiment was mainly focused on Bitcoin (BTC), with withdrawals for the top cryptocurrency’s products totaling $20 million. By contrast, Bitcoin short products saw inflows for the third week in a row totaling $1.8 million, according to data from CoinShares.
Data from CoinShares showed that “overall volumes across all investment products were low at $844 million for the week,” with Bitcoin market volumes 15% lower than usual, averaging $100 million. 57,000 million. In addition, it seems that there has been a change in sentiment at the regional level, since in the US there were deposits of USD 7.6 million, while in Europe there were withdrawals of USD 23 million.
Minor inflows were also seen in other crypto assets, with Ether (ETH) and Solana (SOL) posting falls of $700,000 and $340,000, respectively. By contrast, investors in blockchain stocks remained bullish, with inflows of $1.6 million last week. CoinShares suggested that investors remain interested in the underlying technology of digital assets, but are wary of the regulatory environment surrounding cryptocurrencies.
According to CoinShares, the week saw little increase in total assets managed (AUM) for short-term bitcoin products. However, despite recent inflows, short-term Bitcoin products have barely seen 4.2% growth in assets under management year-to-date, versus a 36% increase in long-term assets under management in Bitcoin. The data suggests that short Bitcoin positions have not performed as expected this year.
Overall, the negative sentiment towards cryptocurrency investment products is likely to continue until there is more clarity on the regulatory front. As governments around the world continue to grapple with how to regulate this new asset class, investors are cautious, staying on the sidelines until more information is available.
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