• The U.S. has intensified its regulatory approaches towards the Crypto Space, leading to a fear of institutional investors within the industry.
• According to CoinShares, there was a record-high outflow of $32 million from digital asset investment products last week, with Bitcoin suffering the most outflows.
• Altcoins saw mixed performances in terms of outflows and inflows with Ethereum, Avalanche, Polygon and Cosmos recording weekly outflows.
U.S. Regulators Intensify Regulatory Approaches
The crypto space is facing increasing tension as United States regulators intensify their regulatory approaches on crypto token issuers and exchanges with stop order mandates, Wells Notices and hints at lawsuits. This has caused fear amongst institutional investors within the industry due to the strict enforcement actions taken by the government authority.
Record-High Outflow From Digital Asset Investment Products
CoinShares, an institutional crypto fund manager reported that last week saw a record-high outflow from digital asset investment products totaling $32 million in cumulative outflows for the year so far. The primary digital assets suffered the most with about $25 million in outflows accounting for almost 78% of total outflows while short bitcoin investment products recorded total inflows amounting to $3.7 million for YTD (Year-to-date).
Altcoins Witness Mixed Performance
The negative sentiment reflected mixed performance across altcoins with some tokens witnessing overall weekly outflows while others saw more inflows from investors. Ethereum, Avalanche, Polygon and Cosmos recorded overall weekly outflows amounting to $7.2 million, $0.5 million, $0.8 million and $1.6 million respectively while BNB, Ripple (XRP), Fantom and Aave recorded weekly inflows ranging from $036 million to 026million respectively since January 2023 when investor enthusiasm peaked with cumulative inflow totaling 117$million – a 6-month high!
Bitcoin Suffers Most With Negative Sentiment
Bitcoin suffered the most due to this negative sentiment within the digital space as it witnessed massive digital assets investments flowing away from it reaching an all time high this year of 32$million in cumulative out flows for 2021 according to CoinShares report . It seems that even though investor enthusiasm was seen earlier in Jan 2023 , this recent shift has caused immense decline in market sentiments .
In conclusion , U S regulators have increased their enforcement actions which has resulted into fear amongst investors resulting into large scale withdrawals from cryptocurrency markets . Though some altcoins have seen positive returns , overall majority of currencies witnessed losses specially Bitcoin which faced heavy losses leading up to 32$million worth of withdrawals till now .