$1.9 Billion Exodus and A Flicker of Hope for Crypto Investment Funds: CoinShares

Cryptocurrency investment products have experienced nearly $5 billion in outflows over the last month. However, some late-week inflows hinted at a potential turnaround in market sentiment.

Key Takeaways

Cryptocurrency investment products saw nearly $5 billion in outflows in the last month.
ETPs recorded $1.94 billion in outflows last week, slightly down from $2 billion the week before.
Total outflows over four weeks reached $4.9 billion, the third-largest on record.
Despite the overall downturn, XRP ETPs experienced $89.3 million in inflows.
"Smart money" traders are taking a positive stance on XRP, while continuing to short Bitcoin.

According to a report by CoinShares, crypto exchange-traded products (ETPs) faced $1.94 billion in outflows for the previous week — a slight decrease from the prior week's $2 billion withdrawal. Overall, the past four weeks have seen a total of $4.9 billion in outflows, making it the third-largest outflow period on record. Despite this, CoinShares observed early indicators of recovery, noting inflows of $258 million in the final trading days after a string of seven days of redemptions.

Current Market Overview

Crypto investment products have faced significant challenges in recent weeks, suffering almost $5 billion in outflows within the last four weeks. While the situation appears grim, there were signs of a slight recovery with inflows towards the end of last week, as reported by CoinShares.

According to their latest research, last week alone saw $1.94 billion withdrawn from crypto ETPs, which is a minor drop from the preceding week's outflows of $2 billion. This four-week outflow total of $4.9 billion is noteworthy as it is now the third-largest outflow period recorded, trailing only behind the sell-off in March driven by tariffs and the downturn seen in February 2018.

A Silver Lining: XRP’s Positive Trend

XRP exchange-traded products stood out as a notable exception during this downward trend. ETPs linked to XRP saw inflows of $89.3 million last week, despite the token itself declining by 6.9%. In contrast, Solana's ETPs reported $156 million in outflows, with its token experiencing a 3.5% drop.

Bitcoin suffered the largest withdrawals, amounting to $1.27 billion, followed by Ether with $589 million outflows.

XRP and SOL Week Chart. Source: Cointelegraph

Smart Money Moves

Interestingly, "smart money" traders — a designation for the industry's most successful traders tracked by Nansen's blockchain intelligence platform — appear to be optimistic about XRP's short-term prospects. In the last 24 hours, these traders added $10.4 million in leveraged long positions on XRP, maintaining a net long position valued at $74 million.

However, they remain cautious about Bitcoin, holding cumulative net short positions amounting to $325 million, indicating a belief that Bitcoin may continue to decline.

Smart Money Traders’ Positions. Source: Nansen

As the market evolves, investors are advised to watch these trends closely for signs of recovery or further downturns.