The bears were in the driver's seat last week according to the latest crypto fund report from CoinShares. Institutions notched the highest one-week withdrawals since March, when the U.S. began its regulatory crackdown.

A colossal $168 million was sold in the past seven days, marking a second-straight week of sell-offs by large players in the digital asset space.

James Butterfill, head of research for CoinShares did write, however, that August has showcased a market with “exceptionally low trading volume.” The month notched $1.3 billion in volume, translating to 16% below the yearly average.

He also told Decrypt that the low volume is due to “more than seasonal impacts.”


During summer last year, he said, Bitcoin volumes were averaging $7.5 billion per day, compared to $4 billion in 2023.

“Investors are in a holding pattern,” he explained, as they await the much-anticipated spot Bitcoin ETF, which is “likely to take longer than many accept.”

Breaking news today could sway the market, however, as a judge ordered that the SEC’s denial of Grayscale’s spot Bitcoin ETF application be reviewed.

The U.S. regulatory crackdown, says Butterfill, has also had an impact on domestic exchange volumes. He added that the “end to the year-long Binance fee holiday that began in March 2022,” is also to blame for the sharp volume declines in 2023.


Bitcoin, plagued with the aforementioned uncertainty, saw the majority of outflows, not only this week but throughout August. Over the last seven days, large players sold $149 million worth of shares for funds tied to the number one digital asset. Although anyone checking prices on Tuesday, after the Grayscale news, would be hard pressed to believe it.

This was mirrored by large players continuing to offload their short positions, selling $4 million worth. As per CoinShares, that marks an 18-week run of outflows representing 89% of total Assets under Management (AuM).

Even though the regulatory spotlight has been on the U.S., last week's institutional sellers came from across the globe, underlining the idea that negativity among large entities is broad-based.

Germany and Canada marked the week with $68 million and $61 million in outflows, respectively. The former has been offloading digital assets all year, with $194 million worth of selling in 2023.

Not a single entity reported by CoinShares was in the green last week, with double digit selling seen across the majority of institutions.

Ethereum (ETH) also saw the brunt of the bears this past week, totalling $17 million in outflows. August and 2023 in general have shown a generalized down-trend for the number two cryptocurrency, with year-to-date outflows marking $99 million.

Institutions bought minor amounts in Litecoin (LTC) and Ripple (XRP), with CoinShares reporting $0.44 million and $0.5 million worth of purchases respectively. —

The bearish sentiment pervading the market, Butterfill told Decrypt, has seen a decline in stablecoin volumes which comprise roughly 80% of total trading volumes. “There is less appetite for the dollar,” he concluded.


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