Crypto funds endure 8th consecutive week of capital flight

abdelaziz Fathi

Bitcoin posted a weekly outflow as institutional investors continued to pull money out of cryptocurrency products and funds amid an ongoing regulatory headache, data from digital currency manager CoinShares shows.

CoinShares’ weekly survey of cryptocurrency investments shows that net outflows hit $88 million last week. The cumulative crypto exodus over this 8-week run has now reached $417 million, approaching the record 12-week outflow seen between April and June of 2022.

The asset manager also noted that an overwhelming majority, specifically 87% of the capital flight, was concentrated on a single provider, indicating a significant shift in investor sentiment towards that particular entity. Additionally, these outflows were primarily from North America-based investors, reflecting their cautious approach.

On the other hand, there were minor inflows of $9.2 million observed in Switzerland, suggesting some positive investor activity in that region. Conversely, Germany experienced outflows amounting to $9.4 million, indicating a decrease in investor interest in digital asset investment products in the country.

With overall sentiment on cryptocurrencies turning cautious as the digital asset’s searing rally hit a wall, Bitcoin led the tally with $52 million outflows during the week, contributing to a cumulative eight-week outflow of $254 million. These outflows represent approximately 1.2% of the total assets under management (AuM) in Bitcoin-related investment products.

In terms of short positions on Bitcoin, there were outflows of $1.1 million. The seven-week streak of outflows from investment funds betting against the primary cryptocurrency now accounts for approximately 44% of the AuM in this category.

The decline came as crypto prices have closely tracked declines in equities over the last two weeks as investors unloaded assets seen as speculative and higher risk. There has been more alignment between crypto and US stocks, particularly tech companies, because investors treat both assets as riskier investments with higher growth potential and risks.

Moreover, other assets including Ethereum saw outflows amounting to $36 million, marking the largest single week of negative net flows since the Merge in September. However, Ethereum has fared relatively better compared to Bitcoin, as the total outflows represent only 0.6% of the Assets under Management (AuM) for Ethereum-related investment products.

Altcoins, which have generally been less affected by the recent negative sentiment, saw mixed performance, with minor inflows observed in Litecoin, XRP, and Solana, while outflows were observed from Polygon. Interestingly, when considering the overall picture, altcoins have seen inflows year-to-date (with the exception of Tron), which contrasts with the outflows witnessed in Bitcoin and Ethereum.

Read this next

Digital Assets

TYRION Advances Decentralized Advertising with Strategic Move to Coinbase’s Base Chain

In a game-changing partnership, decentralized advertising pioneer TYRION integrates with Coinbase’s Base Chain, marking a synergistic leap towards transparent, efficient, and innovative digital advertising solutions in a future driven by blockchain.

Institutional FX

FXSpotStream reports highest ADV in six months

Trading volumes on institutional FX platforms surged in September as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are not yet losing momentum.

Digital Assets

Coinbase makes major push into Singapore with MPI license

Cryptocurrency exchange Coinbase has secured a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS).

Retail FX

Begin Your Trading Journey by Learning How to Use Trading 212

In the upcoming content, the process of getting started with Trading 212 is explored, from registration and choosing account types to the benefits of connecting with Traders Union.

Institutional FX

Cboe reports +10% increase in monthly FX volumes

Cboe’s institutional spot FX platform today announced its trading volume for the month ending September 2023, which showed resurgence in activity following two consecutive months of reduced trading volumes.


Muinmos integrates TConsult’s Investor Self-Declaration platform into client onboarding platform

“Given the increasing regulatory demands, our clients have eagerly anticipated this integration. Partnering with TConsult, one of the industry’s foremost tax experts, allows us to offer a comprehensive solution. By embedding digital tax certifications into our onboarding processes, we provide a more efficient, risk-mitigated approach to client initiation.”


TS Imagine taps Cassini Systems’ pre-and post-trade margin and collateral analytics

“Joining forces with Cassini allows us to offer a single, integrated system that provides in-depth analytics, streamlining operations for investment and risk management teams. This collaboration stands to significantly benefit our clients in the ever-evolving market landscape.”

Retail FX

XTB launches fractional shares offering in the UK

“The roll-out of Fractional Shares has made capital markets even more accessible for UK investors. Having observed the positive reception to our Fractional Shares in other European regions, we’re confident that this addition fortifies our competitive stance in the UK, positioning XTB as a go-to destination for a diverse range of investors.”


Baton Systems launches DLT-powered post-trade solution Core-Payments ahead of T+1

“With the transition to T+1 now just months away, and with regulators growing increasingly vocal around the need for greater settlement control and supervision, it is paramount that market participants ensure they are fully prepared to cope with any rise in settlement risk