Trading volumes in crypto investment products last week hit their lowest levels since October 2020 as outflows in August continued, according to CoinShares data.
These offerings hit trading volumes of $901 million last week,
substantially lower than the year-to-date weekly average, which stood at $2.4
billion as of Aug. 8.
Digital asset investment products also saw net outflows of $27
million last week, which was slightly higher than the $9 million in outflows
from the week prior, the data shows.
“While history indicates this is in part due to seasonal effects,
we believe it also highlights continued apathy following recent price
declines,” CoinShares Head of Research James Butterfill said in the crypto
investment firm’s Monday report.
Bitcoin and ether were trading at roughly $20,170 and $1,510 at
11:00 am ET on Monday — each down about 7% in the past seven days.
Last week’s negative net flows were driven by $29 million in
outflows from bitcoin products. Investment products focused on shorting bitcoin
saw small inflows of about $1 million.
“Both imply minimal but continued
caution from investors which we believe is due to the ongoing hawkish rhetoric
from the US Federal Reserve,” Butterfill added.
Fed Chair Jerome Powell warned during
remarks on Friday at the Jackson Hole Economic Symposium that sustained price
stability is still a long way off. Following Powell’s comments, some analysts
said they predict another rate hike of 75 basis points in September.
Last week’s outflows marked the third consecutive week of negative
flows for crypto investment products, amounting to $46 million over that span.
That trend comes after net inflows into crypto investment products totaled $474 million in July —
the largest monthly total in 2022.
The influx of money into such offerings last month was partly
driven by a reversal in ether products, which tallied flows of $138 million in
July, compared to combined negative net flows of about $450 million in the
prior six months.
Ether-focused products saw minor outflows of about $1 million last
week. The number implies that, despite improving confidence due to Ethereum’s upcoming Merge next month,
investors prefer to wait for the blockchain’s move from proof-of-work to
proof-of-stake before adding to positions, Butterfill said.
Source: blockworks