Crypto Outflows Hit 7-Week Streak, But Sentiment May Be Turning 

• Outflows from crypto asset funds continued last week, hitting a seven-week streak.
• Despite the continued flows, the data indicates that market sentiment may be at an inflection point.
• This shift comes as Bitcoin bucks the market trend.

While crypto asset prices have significantly recovered from the lows of the current bear market cycle, investor confidence remains shaky. This uncertainty has been heightened by an eerie calm that has gripped the market in recent weeks. 

With the lull dragging on, crypto funds continue to record outflows, though recent data suggests that the sentiment may change soon.

Outflow Tide Eases

According to CoinShares’ most recent digital asset funds flow report released on Monday, September 4, crypto funds last week recorded outflows totaling $11.2 million, extending the streak for a seventh week with the total outflows over the period at $342 million. Polygon (MATIC) and Ethereum (ETH) investment products were among the biggest losers, with $8.6 million and $3.2 million in outflows, respectively.

But per the data, outflows cooled off significantly last week compared to the previous week, which saw outflows totaling $168 million. The decline suggests a potential shift in market sentiment and comes as Bitcoin (BTC) investment products, typically the primary focus of outflows, bucked the market trend, recording inflows of $3.8 million. 

CoinShares Head of Research James Butterfill highlighted that last week’s flows, like most of the year, reflected the effect of crypto regulations on investor sentiment. The researcher explained that the week had started on a high note as hopes for a spot Bitcoin ETF approval in the U.S. rose following Grayscale’s legal win against the SEC. This excitement, however, quickly faded as the SEC pushed its decision on several Bitcoin ETF applications to October 2023.

On the Flipside

• Digital asset fund flows remain net positive year-to-date at $165 million.

Why This Matters

Crypto fund flows reflect the overall market sentiment and can serve as a guide to investors and traders. Last week’s flows suggest that the market sentiment could be at an inflection point with negative sentiment cooling.

Read this to learn more about previous digital asset fund flows:

Crypto Funds See Record Outflows Amid Bitcoin ETF Uncertainty

Learn more about why Buterin has dumped his MKR holdings:

Buterin Dumps MakerDAO Tokens, Slamming Solana Plan as “Weird”