Bitcoin funds observed record outflows of $453 million last week, and Glassnode highlighted that this period is the worst bear cycle in history, but other metrics present gains.
Bitcoin sinks below $21,000 as institutional traders are dumping the flagship digital asset at a record pace. However, other metrics suggest that the downtrend could reach a level to reverse.
Bitcoin hedge funds experienced record outflows valued at $453 million last week, according to a recent report from CoinShares. The emergence that possibly caused the crash of Bitcoin to a range near $17,000 is perhaps the largest in terms of dollar value in the crypto history.
CoinShares expressed that regarding assets under management (AUM), the outflows were the third-largest fluctuations ever recorded; accounting for 1.2% of the total AUM of all the funds it tracks. The worst emergencies recorded happened during the 2018 market, which accounted for 1.6% of total AUM.
According to the report, the outflows, which focused on Bitcoin, erased almost every inflow from the past six months and left Bitcoin’s whole AUM at $24.5 billion, its lowest point since early 2021.
Bitcoin Funds See Record Outflows
The funds CoinShares follows, such as the popular ETPs, mutual funds, and OTC trusts, are investment products that grant traders exposure to digital assets without holding said currencies. When investors purchase through a crypto fund, it gets called an inflow; it is usually a bullish movement, and when they sell, it gets called an exit, often described as a bleak signal.
According to the report, the outflows arrived almost exclusively from Canadian bourses and a specific, unnamed supplier. However, it was not all negative, as other BTC fund providers also observed inflows of at least $70 million, highlighting the highly polarized sentiment among digital asset investors.
In addition to Bitcoin, funds backed by other assets, such as Ethereum, Short Bitcoin, Cardano, Tron, and Polkadot, reported total inflows of $30 million last week, and net outflows totaling $423 million, as highlighted by Decrypt.
Meanwhile, other reports also make different interpretations on the subject, including one from blockchain analytics firm Glassnode, which described the recent cycle as the worst in Bitcoin history. Bitcoin and Ethereum traded below their historical price achieved in previous cycles.
The Worst Cycle
However, despite the eccentricities observed, Glassnode highlighted that there was no reason to think this cycle was so different from the previous ones, considering that the response from investors to this Crashdown was unusual.
As the global capitalization fell below $1 trillion, a long distance from its $3 trillion high in November, fear, and uncertainty invaded investors, who decided to sell at record losses. The recent Crashdown in prices to the $20,000 field got caused by the most prominent USD-denominated daily realized loss in history.
By: Jenson Nuñez
