Grayscale Bitcoin ETF’s $2bn in outflows lead record bleed in crypto funds. Here’s what will lure investors back

Grayscale Bitcoin ETF’s $2bn in outflows lead record bleed in crypto funds. Here’s what will lure investors back

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  • Digital asset investment products experienced $942 million in net outflows.
  • The record outflows were driven by investors exiting the Grayscale Bitcoin ETF.
  • New Bitcoin ETF issuers recorded net inflows despite the exodus.
  • Decentral Park sees them returning: “the sales effort to institutional clients has just begun”

Investment funds holding digital assets saw record outflows last week when Grayscale's Bitcoin exchange-traded fund lost nearly $2 billion.

Because?

Blame falling cryptocurrency prices, which have spooked investors already put off by the high fees set by digital asset manager Grayscale.

Record departures

Digital asset investment products ended a seven-week streak of capital inflows into one bank, recording a record $942 million in outflows last week.

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Inflows of $12.3 billion were recorded over the course of seven weeks.

Grayscale's GBTC led the way with nearly $2 billion in outflows.

Investment products Ethereum and Solana also saw outflows totaling around $34 million and $5.6 million, according to CoinShares. report on Monday.

The other nine US-based Bitcoin ETFs had more than $1.1 billion in inflows, offsetting fund outflows from Grayscale's GBTC.

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The recent drop in cryptocurrency prices “raised doubts among investors, leading to much lower inflows into new ETF issuers in the US,” said CoinShares head of research James Butterfill.

Kelly Ye of Decentral Park agreed. The first week of spot ETF outflows since January “is likely due to negative price action last week,” she said in a separate report.

“We are not particularly concerned because the sales effort to institutional clients has only just begun.”

“The bad feeling wasn't just focused on the United States,” Butterfill added.

Sweden, Switzerland, Hong Kong and Germany recorded outflows of $37 million, $25 million, $35 million and $4 million respectively, it said.

Brazil and Canada experienced inflows of around $9 million, respectively.

Crypto market drivers

  • Bitcoin added 2.7% to trade above $67,100 on Monday.
  • Ethereum rose 1.4% to $3,400.

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