Last week brought significant changes to the landscape of global investment in cryptocurrencies. The crypto investment products saw $147 million in net redemptions, which snapped a three-week inflow.
The digital currency exchange saw the biggest outflow of Bitcoin funds of $159 million, while Ethereum also recorded outflows of $28.9 million.
James Butterfill, the Head Of Research at CoinShares, stated that the markets have been on the move due to the expectations of higher interest rates.
– Advertisement –
Butterfill expounded, “There was higher than expected economic data last week which lessened the chances of big rate cuts, this is likely the reason for the lower investor sentiment.”
Consequently, outflows from the U.S., Germany, and Hong Kong amounted to $209 million, $8.3 million, and $7.3 million, respectively.
Regional Impacts on Crypto Fund Flows
Notably, the analysis of fund flows by regions show that the effect is more complex than a simple global trend. Whereas the U.S., Germany, and Hong Kong recorded net outflows, Canada and Switzerland had the reverse experience. These two countries had inflows of $43m and $34.9m, indicating that they have local confidence in the possibility of earning a return from crypto assets.
Despite the overall negative trend, investment products that provide access to a diversified basket of cryptocurrencies remained popular. This has been the 16th straight week for inflows, with last week’s being at $29.4m.
Combined, inflows into these products have totaled around $431 million since June, equivalent to 10% of assets under management in global crypto funds.
Moreover, this long-term persisting interest suggests a strategic change in the investment approach of investors toward diversified crypto investment products.
Such products reduce risk through diversification. These are suitable for investors who have a favorable outlook on the overall crypto market but are still worried about the high risk that comes with investing in certain coins.
Uptober Rally: Anticipated Highs for Bitcoin
While the total funds flow among cryptocurrencies is negative, the crypto community is optimistic about Bitcoin. Many expect new all-time highs this month. October has always been a good month for Bitcoin in terms of price appreciation, as it has been in the past.
The positive trend is backed by factors like stabilization of trading of Bitcoin spot Exchange-Traded Funds (ETFs) and expected increases in liquidity from possible rate cuts. These factors could foster an Uptober rally that would attract more attention as well as investment to Bitcoin, potentially leading to new all-time highs.
In addition, the 4-hour chart still shows a bullish momentum given by the MACD line crossing the signal line above. This is usually considered as a bullish market indicator since the buying pressure is stronger than the selling pressure.
Concurrently, the histogram, which represents the difference between the MACD line and the signal line, shows positive values, indicating growing bullish momentum. This increase in histogram bars can often precede further upward price movement, supporting the optimistic outlook for BTC this month.
At the time of writing, Bitcoin price is $63,278, reflecting a 1.35% increase over the last 24 hours. The current trading volume is approximately $32.79 billion, indicating increased market activity.
