Investors Remain Cautious Over Crypto Assets


On March 6, European CoinShares, a cryptocurrency investor firm, published its “Digital Asset Fund Flows Report”. It is clear that investors still have negative opinions about crypto investment products, with $17 million in outflows.

The majority of negative sentiment was focused on Bitcoin (BTC), with outflows for cryptocurrency totaling $20 million. In contrast, short-Bitcoin products saw inflows of $1.8 million for the third week.

CoinShares’ data shows that “overall volumes across investment products were low at US$844 million for the week”, with Bitcoin market volumes 15% lower than normal, an average of $57 billion. Additionally, there seems to have been a shift in sentiment regionally, with the U.S. experiencing inflows of $7.6 million while Europe saw outflows of $23 million.

Minor inflows were observed in crypto assets with other currencies, like Ether (ETH) and Solana’s SOL (SOL) seeing drawdowns of $700,000 and $340,000, respectively. However, investors in blockchain equity remain bullish with an average of $1.6 million inflows last week. CoinShares suggests that investors still care about the technology underpinning digital assets but are cautious about the regulatory environment.

According to CoinShares, there was a small increase in total assets under management (AUM) of short-term investments. Bitcoin products for the week, however, saw a 4.2% increase in AUM over the previous year, compared with 36% growth in long-Bitcoin AUM. The short-term effects are evident: Bitcoin positions have not provided the expected returns in this year’s economy.

Related: BTC price ‘in the chop zone’ — 5 things to know in Bitcoin This week

Overall, this negative sentiment towards crypto investment products is likely to continue until there’s more clarity on the regulatory front. As governments worldwide continue to grapple with how to regulate this new asset class, investors are being cautious and waiting on the sidelines until they have more information.

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