On March 6, European cryptocurrency investment company CoinShares released the "Digital Asset Fund Flow Report", which shows that investors continue to show negative sentiment towards encrypted investment products, with a total outflow of $17 million.
Negative Sentiment Focuses on Bitcoin, outflows of cryptocurrencies totaled $20 million. In contrast, short bitcoin products saw inflows for the third week in a row, totaling $1.8 million, according to the report. According to CoinShares, “total trading volume in investment products was low this week at $844 million,” with bitcoin market volume 15% lower than usual at an average of $57 billion. Additionally, regional sentiment appears to have shifted, with US inflows of $7.6 million and Europe outflows of $23 million.
Small inflows were also observed in other cryptoassets, with Ether, SOL with Solana. Reductions of $700,000 and $340,000, respectively. In contrast, blockchain stock investors remain bullish, with $1.6 million inflows last week. Investors remain enthusiastic about the underlying technology of digital assets, but cautious about the regulatory environment for cryptocurrencies, CoinShares said.
According to data from CoinShares, the total assets under management (AUM) of shorted Bitcoin products increased slightly this week. However, despite the recent inflows, short Bitcoin products are only up 4.2% AUM year-to-date compared to 36% growth in long Bitcoin AUM. Data suggests that short bitcoin positions have failed to deliver expected returns this year.
Overall, negative sentiment towards crypto investment products is likely to persist until there is more clarity on the regulatory front. As governments around the world continue to grapple with how to regulate this new asset class, investors are cautious and waiting on the sidelines until they have more information.
