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CoinShares revealed a staggering $528 million outflow from crypto products last week due to recession fears.
According to a new analysis by the crypto investment business CoinShares, cryptocurrency assets began seeing substantial withdrawals last week due to mounting concerns about a potential U.S. recession and global politics.
Digital asset investment products experienced their first outflow in four weeks, totaling $528 million, during the week of July 28 to Aug. 3, according to CoinShares' most recent report on digital asset fund flows, which was published on Aug. 5.
Market Liquidations Impact Crypto
According to CoinShares, the most recent crypto sell-off is thought to be a response to concerns about a US recession, geopolitical unpredictability, and the resulting widespread market liquidations of most assets.
Crypto outflows totaling $400 million were driven by Bitcoin, the biggest cryptocurrency asset by market value, according to statistics from CoinShares. After five weeks of gains, Bitcoin saw its first losses during the sell-off.
The second-largest cryptocurrency by market cap, Ether, had withdrawals of $146.3 million last week, with an extra $2.8 million seen by Solana (SOL).
Multi-Asset Products Attract Inflows
Last week, however, $1.8 million went into short-Bitcoin, while $18.1 million went into multi-asset crypto investment products.
According to CoinShares:
“Blockchain equities continued to see outflows, with last week seeing a further $18 million, in line with outflows from broad tech-related exchange-traded funds.”
Since CoinShares only looked at the week beginning July 28th and ending August 3rd, it didn't account for the most recent significant drop in value across a number of markets that occurred on August 4th and 5th.
Bitcoin's Price Falls Significantly
Following its failure to regain support at $69,000 on July 29, Bitcoin's price proceeded to fall below $50,000 on August 5, eventually reaching its lowest point since February 2024.
Bitcoin (BTC) is currently trading at $51,301, a decrease of 15.6% over the last 24 hours, as reported by CoinGecko.
According to data compiled by CoinGlass, 290,000 traders were liquidated in the last 24 hours, resulting in a total of $1.1 billion following the market dip.
Despite claims by industry heavyweights like Joseph Young that the "bottom is nearing" in Bitcoin's price, not all analysts share this bullish outlook.
Analyst Predicts Further Bitcoin Decline
10x Research CEO Markus Thielen stated in the most recent market report dated August 5th:
“Although Bitcoin has been in a gradual downtrend, marked by three tops and two bottoms, we anticipate the support line at $55,000 will break, potentially driving prices down to $42,000.”
Ether might fall below $2,000 further, says the analyst. Furthermore, he stated:
“While this may seem extreme to some, economic weakness, as indicated by our ISM report, ongoing weak market structure, on-chain data, and our cycle analysis suggest further stress ahead.”
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