Crypto Funds Witness $134 Million Outflow, Second Largest Weekly Redemption Since January 2022

Last week, crypto funds reportedly suffered their second largest outflow since January 2022 this year. This is being attributed to investors withdrawing money from both Bitcoin and Ethereum funds, as per a report in CoinShares yesterday.

The crypto funds witnessed $134 million in net outflows, which marked the second worst week in the year for funds that manage digital asset investments. The outflow also represented a sharp turn after two straight weeks of heavy inflows.

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Bitcoin-related products took the majority of the blow with outflows of $131.8 million as redemptions. But short bitcoin investment products, which bet on making profits when bitcoin¡¯s price declines, saw inflows totaling $2 million, which was their largest inflow on record.

The reversal came after the price of Bitcoin, which is the largest cryptocurrency by market capitalization, rose to $48,000 from $38,000 in only two weeks by early April 2022.

The Coinshare report stated that ¡°We believe price appreciation the previous week may have prompted investors to take profits".

Besides bitcoin outflow, funds focused on Ethereum too, saw $15.3 million in outflows, which brought2022¡¯s total outflows (till date) to $126 million.

Meanwhile, altcoins (excluding Ethereum) and multiple-asset funds continued to stay resilient and recorded inflows of $6 million and $5 million, respectively.

Further breaking down the funds by assets, Solana led the way with $3.7 million in inflows, and funds focused on cardano (ADA) saw $1 million in inflows. Also, $600,000 flowed into litecoin (LTC) funds.

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Apart from all this, the new crypto laws, including 30% crypto tax which became effective this month, have reportedly resulted in a major drop in overall crypto activities across crypto exchanges in India, based on data collected by cryptocurrency research firm Crebaco.

Indian crypto exchanges reportedly witnessed downfalls, including a 72% drop in trading on WazirX, a 59% drop on ZebPay, a 52% drop on CoinDCX and a 41% drop on BitBns.

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