(Kitco News) – Globally listed crypto funds saw a bounce back in sentiment and inflows last week as the assets under management for all products combined increased by $862 million, almost fully recovering the prior week’s record outflows of $931 million.
“While this recovery is encouraging, ETF activity is slowing down, with daily trading turnover now at US$5.4bn, down 36% relative to its peak 3 weeks ago,” said James Butterfill, head of research at CoinShares. “Although this remains well above the US$347m 2023 average,” it implies that initial market hype is cooling, he added.
The U.S. continued to dominate from a regional perspective, with $897 million flowing into U.S.-listed funds while Europe and Canada combined for outflows of $49 million, bringing the year-to-date outflows to $785 million.
Bitcoin (BTC) remains the primary focus for investors, with BTC exchange-traded products recording a net inflow of $865 million last week. Various funds saw a combined total of $1.8 billion flow into their coffers, while Grayscale’s GBTC suffered $967 million in outflows.
“Short-Bitcoin saw outflows for the second week, totalling US$2m,” Butterfill said.
Ethereum (ETH) products experienced $19 million in outflows, their fourth consecutive week of outflows after the odds of an Ether ETF being approved in May declined below 30%.
Re Eth ETF approval, we are holding the line at 25% odds altho tbh it is a very pessimistic 25%. The lack of engagement seems to be purposeful vs procrastination. No positive signs/intel anywhere you look. Personally hope they do approve it but it just ain't looking good. https://t.co/nuBdCDE18L
— Eric Balchunas (@EricBalchunas) March 25, 2024
Ethereum underwent its latest update – the Dencun upgrade – on March 13, and the top smart contract platform has a history of pullbacks following major changes. According to Butterfill, pullbacks for Ether are “a common trait post network upgrades, reflecting investor apprehension of their success.”
“Altcoins saw inflows totalling US$18.3m last week, with Solana leading, seeing US$6.1m inflows,” Butterfill said. “Other notable flows were from Filecoin, Polkadot and Chainlink, with inflows of US$3.9m, US$2.4m and US$1.9m respectively.”
Despite Tuesday’s selloff, data provided by Alternative shows that the sentiment in the crypto market is still in ‘Extreme Greed’ territory.
According to analysts at market intelligence platform Santiment, prices might not resume their uptrend until there is a decline in sentiment.
“Bitcoin has seen a drop to $66.4K, and #altcoins have shed much more of their market caps as prices have continued their concerning retracement to kick off April,” the analysts said. “However, the crowd is staying quite strong and showing confidence toward the prospects of a quick rebound.”
“The frequency of words like #buy, #buying, #bought, and #bullish are being spread at about double the frequency of words like #sell, #selling, #sold, or #bearish,” they added. “Historically, the best dip buy opportunities occur when the crowd consensus is showing a bit of fear toward a further drop. This usually results in small wallets dropping their bags for whales and sharks to scoop them up.”
