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The 70th edition of the weekly report by cryptocurrency exchange Bitfinex has revealed that digital asset funds are witnessing massive outflows as investors lose confidence in the market.
According to the paper, crypto funds experienced the most significant outflow since March as the US Securities and Exchange Commission (SEC) delayed the long-awaited spot bitcoin exchange-traded fund (ETF).
Crypto funds record massive outflow
Between the third and last week of August, crypto funds saw a cumulative outflow of $179 million, with bitcoin funds leading the way with $149 million. Within the same period, investors continued to liquidate their short positions on exchanges, adding an additional $4 million to outflows.
For altcoin funds, Ethereum saw an outflow of $17 million, while XRP and Litecoin recorded inflows of $0.5 million and $0.44 million as investor interest in them increased.
The 18-week outflow wiped out 89% of total assets under management dedicated to crypto investments. Trading volume for investment funds also declined to $1.3 billion, representing a 16% decline from the annual average.
Bitfinex attributed the massive outflow to investor pessimism, which was driven by the perception that applications to launch the spot bitcoin ETF could be further delayed, and fears have been reinforced by recent announcements from the SEC.
Bitfinex said, “The above data suggests that it will take longer than previously thought for markets to receive bullish catalysts, and the longer the ETF saga is, the less likely the impact on real market prices in crypto assets will be.”
market bottom signals
While the crypto market has recorded capital outflows, stable coins are seeing an increase in adoption. Bitfinex noted that since 2022, stablecoin transactions on layer one blockchains have exceeded $6.8 trillion. The stablecoin transaction volume is also growing faster than traditional payment giants PayPal and Mastercard.
Furthermore, on-chain metrics suggest that there could be a potential market bottom for Bitcoin (BTC) in terms of percentage of price depreciation. However, BTC may not recover immediately, so the timing of capitulation remains unclear.
Meanwhile, frequent exchange BTC outflows of bitcoin, possibly from self-custody cold wallets, indicate that long-term holders are still bullish and would like to hold onto their assets rather than trade them.
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source: cryptopotato.com
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