Outflows for Bitcoin-specific funds totaled $453 million, wiping off all the inflows made over the past six months, according to a CoinShares report.
The funds measured are investment products that give traditional investors exposure to crypto without having to also custody of said crypto themselves.
When investors buy a crypto-based fund, it is called inflows and is usually a bullish sign. The opposite process, when investors rotate out of said funds, is called outflows and is often bearish.
In terms of assets under management (AUM), last week's outflows were the third-largest on record, representing 1.2% of the entire AUM of all funds that CoinShares tracks. The worst was outflows of 1.6% recorded during the 2018 bear market.
However, last week’s outflows’s the largest in dollar value terms.
Apart from Bitcoin, other assets including Ethereum ($10.9 million), Short Bitcoin ($15.3 million), Cardano ($0.8 million), Tron ($0.1 million), Polkadot ($0.2 million) and Other Assets ($2.9 million) reported total inflows of $30 million last week, resulting in net outflows totaling $423 million.
Brands like CoinShare Physical ($3.7 million) and Purpose ($490.7 million) reported negative outflows last week. Elsewhere, ProShares $(42.1 million), 21Shares ($8.5 million), and ETC Group ($13 million) ended up on the positive side last week.
What’s driving Bitcoin outflows?
Recently, central banks including the U.S. Federal Reserve and the Bank of Canada have implemented rate hikes as a measure to combat rising inflation.
The Bank of Canada hiked rates from 1% to 1.5% earlier this month. The Fed also made a 0.75% rate hike from 1% to 1.75%.
Rate hikes often result in higher bond yields which may appear more attractive than crypto funds to many investors.
These hikes have hit most all markets, including crypto, quite hard. But it was Canadian investors who appear to have abandoned Bitcoin en masse. According to the CoinShares report, Toronto-based Purpose Investments’ crypto products suffered a whopping $490.7 million in outflows.
As for the United States, the report indicates that products within the country saw inflows totaling $41 million.
The leading cryptocurrencies have continued to slip in recent days. Bitcoin is down 2.3% in the last day and is trading hands at around $20,752.
Ethereum is trading at around $1,184, down 2.6% over the past 24 hours, according to data from CoinMarketCap.