Digital Asset Investment Products Gain $441M Amid Mt. Gox, German Sell-Offs: CoinShares

Ruholamin Haqshanas

Last updated:

July 8, 2024, 07:50 EDT | 2 min read

Digital asset investment products have seen inflows totaling $441 million amid the recent sell-off by Mt. Gox and the German government.

According to a Monday report by CoinShares, the inflows came as investors saw the price weakness driven by Mt. Gox and the German government’s selling pressure as a buying opportunity.

The report noted that while volumes in exchange traded products (ETPs) remained relatively low at $7.9 billion for the week, in line with the typical seasonal pattern of lower volumes during the summer months, inflows into digital asset investment products have remained robust.

However, the participation rate of ETPs in the total market for trusted exchanges was 17% lower.

The US Leads in Terms of Inflows

The majority of inflows were observed in the United States, with $384 million recorded.

However, opportunistic buying was also seen in other countries, including Hong Kong, Switzerland, and Canada, which witnessed inflows of $32 million, $24 million, and $12 million, respectively.

Germany, on the other hand, experienced outflows of $23 million.

According to CoinShares, digital asset investment products saw a total of $441 million in inflows last week, with recent price weakness triggered by Mt Gox and selling pressure from the German government likely seen as a buying opportunity. Bitcoin inflows amounted to $398…

— Wu Blockchain (@WuBlockchain) July 8, 2024

While Bitcoin attracted inflows of $398 million, representing 90% of the total inflows, investors also diversified their investments across a broader range of altcoins.

Notably, Solana received $16 million in inflows last week, bringing its year-to-date (YTD) inflows to $57 million, making it the best-performing altcoin in terms of flows.

Ethereum sentiment appears to have turned positive, with $10 million in inflows, although it remains the only ETP to have seen net outflows YTD.

This sentiment, however, has not been mirrored in blockchain equities, which experienced further outflows of $8 million last week, bringing the year-to-date outflows to $556 million.

The inflows also come as spot Bitcoin ETFs in the US experienced a significant influx of investments last week.

On July 6, the funds recorded $143 million in net inflows, reflecting the highest amount since early June.

Mt. Gox Selling Pressure Impact Bitcoin Price

In a recent note, Matteo Greco, a research analyst at Fineqia International, highlighted the impact of Mt. Gox and miners’ selling pressure on Bitcoin’s price decline.

Bitcoin closed the week at approximately $55,850, marking an 11% decrease from the previous week’s closing price.

Throughout the week, strong selling pressure was evident, with BTC trading as low as $53,500 before rebounding to $58,250 and ultimately closing at $55,850.

On-chain trading volume has remained consistent with the year-to-date average, with BTC on-chain daily volume at around $41.1 billion and weekly volume at approximately $288 billion.

The high on-chain selling pressure can be attributed to the start of Mt. Gox repayments, as well as ongoing selling pressure from miners following the recent halving, Greco said.

As reported, Bitcoin miners are facing a critical phase known as “capitulation” as their profits diminish amidst the recent sell-off in the Bitcoin market.

Miner capitulation occurs when miners reduce their operations or sell a portion of their mined Bitcoin and reserves to sustain their operations, earn yield, or hedge their Bitcoin exposure.

Follow Us on Google News