The crypto industry is still stuck in a period of heightened volatility as asset outflows continue to be the dominant trend in the market.

Bitcoin has seen its third consecutive week of outflows despite a slow price from coinshares Last week’s outflows totaled $12 million, showing inflows reaching $10 million.

Weekly asset flow
Graph showing weekly cryptocurrency flows in USD (Source: CoinShares)

The $2 million outflow is not noteworthy, but the inflow amount is notable. All of the $10 million inflows were into digital asset investment products shorting bitcoin.

Bitcoin outflow
Graph showing weekly crypto asset flow by asset in USD (Source: CoinShares)

Ethereum remained unscathed, seeing only a $200,000 outflow over the past week, while Polygon (MATIC), Solana (SOL) and Cardano (ADA) saw smaller inflows.

Bitcoin outflow assets
Chart showing flow by asset in USD (Source: CoinShares)

US investors are becoming increasingly nervous after last week’s FOMC meeting as the Federal Reserve released stronger-than-expected macro data.

Outflow by country
Chart showing flows by exchange country in USD (Source: CoinShares)

The significant difference in outflows seen in the US and other countries may be due to the US market’s sensitivity to regulatory crackdowns. Less regulated markets are less likely to see significant outflows or increases in short positions following announcements or enforcement by government agencies.

This is evident in blockchain stocks, a regulated product available to US and Canadian investors. Negative sentiment also hit them, leading to a $7.2 million outflow.

Since peaking in November 2021, public blockchain companies have become increasingly sensitive to broader market dynamics. Most publicly traded blockchain companies are focused on growth. This means that even small changes in interest rates can make them vulnerable and prone to volatility.

etp leaks bitcoin
Diagram showing the flow of each blockchain stock ETP (Source: CoinShares)

By Jules

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