Digital asset investment products recorded the largest weekly outflow of 2023.
A consequence of intensified crackdown by the US SEC on all aspects of the crypto sector has been the departure of institutional investors.
According to data released by CoinShares on February 20, digital asset investment products saw the biggest weekly outflows of 2023 at $32 million.
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Bitcoin-related products saw the largest outflows at nearly $25 million, representing 78% of all outflows. There was also an in-flow of $3.7 million of short-Bitcoin products.
The negative sentiment amongst institutional investors did not impact the broader market. CoinShares report noted that, over the last week, Bitcoin prices rose almost 10%.
The report noted that Bitcoin funds saw inflows of $116 million in the last week of January, with the cryptocurrency holding onto its gain. Other major coins like Ether (ETH), Cosmos (ATOM), Polygon (MATIC), and Avalanche (AVAX) experience outflows of $7.2 million, $1.6 million, $0.8 million, and $0.5 million, respectively.
Institutional investors were more bullish about blockchain-tied equities, which saw inflows of $6.9 million, representing the sixth consecutive week of inflows.
The report also noted that German and Canadian investors accounted for most outflows. German crypto investors withdrew $23.1 million, while Canadian crypto-enthusiasts withdrew approximately $10.6 million.
Intensified US regulatory pressure was blamed for the outflows. Every aspect of the sector has been targeted by US authorities, with the SEC taking the lead. For instance, the New York Department of Financial Services ordered Paxos to stop minting the BUSD stablecoin. Shortly after, the SEC revealed plans to sue Paxos for issuing BUSD, which it argues is unregistered security.