Short-Bitcoin products gain popularity as clampdown-driven crypto outflow persists

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Crypto investment products have seen a trend of outflows for five consecutive weeks, as $54 million exited these products in the past week, according to the latest CoinShares weekly report. This extends the total outflow over the last nine weeks to $455 million, underscoring the prevailing bearish sentiment in the market.

US top outflows

CoinShares noted that the United States dominates the outflows, contributing around 77% of these exits due to the seemingly unending regulatory clampdown on crypto-related businesses within the region.

U.S. financial regulatory bodies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), have initiated enforcement actions against various crypto entities such as Binance and Coinbase, as well as decentralized finance protocols like Opyn and Deridex.

These regulatory measures have created a challenging environment for crypto companies operating in the United States, as the regulatory landscape remains unclear.

Short-BTC products are ‘most loved’

CoinShares dubbed short-Bitcoin investment products the “most loved,” even though it experienced outflows of $3.8 million in the past week. The company reports that these products have garnered approximately $12 million in inflows for the current month.

Conversely, BTC investment products bore the brunt of last week’s outflows, accounting for 85% of the total at roughly $45 million. Their monthly performance shows a significant negative trend, with withdrawals exceeding $100 million, indicating a consistent exodus of investors.

In a surprising twist, Ethereum, despite its attractive investment opportunities and strong demand for its staking yields, witnessed an outflow of $4.8 million last week. CoinShares had previously categorized this digital asset as the “least loved” among investors.

Despite the prevailing bearish sentiment, select altcoins managed to attract inflows. Solana, Cardano, and XRP recorded inflows of $0.7 million, $0.43 million, and $0.13 million, respectively.

Nonetheless, flows into digital asset products remain positive throughout the year, as it currently stands at $51 million on the year-to-date metric.

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