The scale of the outflows reflects a combination of macroeconomic pressures and market-specific weakness. In its report, CoinShares cited dwindling expectations for interest rate cuts, negative price momentum and disappointment that digital assets have yet to benefit from the so-called debasement trade as key drivers behind the pullback.
The downturn in the crypto market is largely macro-driven rather than a reflection of weakening crypto usage, according to industry executives.
“Entering February with bearish sentiment wouldn’t be surprising, but I expect less aggressiveness,” said Maksym Sakharov, co-founder and group chief executive of WeFi.
“The outflows primarily came from the U.S., and the market-wide downturn is largely due to macroeconomic expectations. The downturn isn’t happening because of a collapse in crypto usage.”
Regionally, investment product outflows were heavily concentrated in the United States, which accounted for nearly $1.8 billion of the total. But elsewhere, sentiment was more mixed. Sweden and the Netherlands recorded smaller outflows of $11.1 million and $4.4 million, respectively.
Investors in Switzerland, Germany and Canada took advantage of recent price weakness to add to positions, seeing inflows of $32.5 million, $19.1 million and $33.5 million, respectively, the report said.
