Bitcoin funds listed on US exchanges recorded net outflows of 389.7 million dollars in the week that began on 10 August, their largest weekly withdrawal since the end of June, according to data compiled by Bloomberg. The figure is a sharp reversal from the previous week, when the 13 US-listed funds took in 853.5 million dollars, the strongest weekly inflow since April.
Why money arrived earlier in the month
Those inflows followed a rare breach of Cold Card wallets, which are held offline. The episode briefly increased appetite among some investors for exposure to bitcoin through conventional financial products that spare them the task of holding and securing the digital currency themselves. Esme Pau, head of capital markets and policy at blockchain security firm CertiK, reads the latest outflows as a sign of weakness in the bitcoin market, and regards the post-breach flows as an exception. Institutional sentiment, in her assessment, remains cautious and tilted toward pessimism.
Price and volatility
The withdrawals coincide with bitcoin trading near 63,000 dollars, roughly 50 percent below the record it set in October. The price was close to flat last week, moving within a band of about 2 percent, while the currency’s implied volatility index, which measures expected moves over 30 days based on options prices, stood near 37 on Monday. That is below its average for the year and far from the peak of 82.2 recorded in early February.
Sentiment is also weighed down by the prospect of higher interest rates and by the absence of legislative progress in the United States on the Clarity bill, which would establish a regulatory framework for the structure of the crypto market.
A gauge of institutional appetite
Flows into and out of these funds matter because they are among the clearest available readings of institutional appetite. The products have become a primary route for traditional market investors to gain exposure to the digital currency without owning it. Sustained outflows could add pressure to both the price and market liquidity, particularly if other large sources of demand stay subdued.
Managers retreat from crypto products
Across the sector, the slump has pushed several asset managers to close crypto funds or shelve planned launches. Grayscale Investments withdrew plans for exchange-traded funds tied to Cardano’s ADA, Polkadot’s DOT and Hedera’s HBAR. Bitwise Asset Management closed two crypto funds, while REX Advisers and Direxion halted a number of specialised products. Trump Media and Technology Group cancelled plans for a fund investing in bitcoin and ether.
Bloomberg data show about 4.7 billion dollars has left bitcoin funds since the start of the year, alongside 1.5 billion dollars from ether funds, with bitcoin down roughly 28 percent and an index of smaller cryptocurrencies falling more than 40 percent. Gracy Chen, chief executive of the Bitget exchange, says liquidity has not returned to the crypto market for about a year, and likens present conditions to 2022, the year several firms in the sector collapsed, among them FTX. Bitget, she adds, is moving toward a multi-asset model combining equities, commodities and digital assets, as institutional investors increasingly want to trade different asset classes on a single platform.
This story was produced in the newsroom from the disclosed sources named above.
