Decline in prices of Bitcoin, others hit crypto fund inflows, leads to $40m outflows: Report

While Bitcoin dropped from around $57,000 to $46,581 during the past seven days, others such as Ethereum, Binance Coin, Cardano, XRP, Polkadot, Dogecoin, Avalanche, Shiba Inu also recorded a decline. (Image: Stockvault)

The drop in crypto prices last week has impacted inflows into cryptocurrency funds and products last week. Digital asset investment products such as cryptocurrencies saw inflows worth $184 million last week, although the sharp price weakness at the end week led to $40 million outflows late Friday, said digital asset management firm CoinShares’ in its weekly report on digital asset fund flows. The inflows during the preceding week saw totalled $306 million last week that had brought year-to-date inflows to a record $9.5 billion.

Prices for the majority of the top cryptos had declined past week. While Bitcoin dropped from around $57,000 to $46,581 during the past seven days, others such as Ethereum, Binance Coin, Cardano, XRP, Polkadot, Dogecoin, Avalanche, Shiba Inu had also registered a decline, data from CoinMarketCap showed. However, there was no clear reason known for the decline.

“Volatility is a part of any market, but informed investors do stand by a particular coin when they understand what is the utility of the project and the technology behind it. Also, it’s good to see that more and more people are realizing that cryptos are the future,” Kumar Gaurav, Founder and CEO, Cashaa had told Financial Express Online.

The inflows though indicated that investors continue to see recent price weakness as a buying opportunity, CoinShares said. Bitcoin inflows totalled $145 million last week even as it bore the brunt of investor jitters with outflows of $42 million on Friday. On the other hand, Ethereum’s inflows were $25 million though it also suffered from minor outflows of $4.7 million on Friday. Other altcoins including Binance and Solana also saw inflows totalling $1.4 million and $4.6 million respectively while Polkadot witnessed $3 million in outflows.

Also read: Cryptos, CBDC, other digital assets can help add $1.1 trillion to Indian economy by 2032: Report

“Solana was seemingly unaffected by the recent price jitters. Bitcoin volumes rose to $15 billion for Friday, above the typical $8 billion a day on average for November and December. We did not see a significant rise in investment product volumes which were $5.8 billion for the whole week,” said CoinShares.

With the fall in crypto prices, the market cap of all cryptos combined had dropped from $2.6 trillion last Friday to $2.01 trillion on Saturday before it scaled back to the $2.4 trillion mark, at the time of filing this report. Bitcoin’s share in the overall crypto market value had declined from 70 per cent at the beginning of 2021 to 40 per cent currently as investors started to also put money into altcoins particularly Ethereum, Binance Coin, Tether, Solana, and others.

The suggestions/recommendations around cryptocurrencies in this story are by the respective commentator. Financial Express Online does not bear any responsibility for their advice. Please consult your financial advisor before dealing/investing in cryptocurrencies.

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