Despite Bitcoin Price Surge, Digital Asset Outflows Persist for Sixth Consecutive Week.

Bombolo | News and Media

CoinShares' report reveals that despite the surge in Bitcoin's price, digital asset investment products suffered net outflows for the sixth consecutive week.

 For the week ending March 17, the total net outflows for digital assets amounted to $95 million. According to the digital asset investment group, the net outflows for digital asset investment products have reached $424 million over the past six weeks.

The combined net outflows for Bitcoin, Ether, and multi-asset digital products amounted to $130 million, but there were inflows of $35 million for Bitcoin. However, these inflows were in the form of short positions, indicating that investors were wagering on a decline in Bitcoin's price.

CoinShares suggests that the data may indicate an investor demand for liquidity. Despite this, the price of the largest cryptocurrency by market value has experienced a significant surge, climbing from approximately $19,400 in early March to nearly $28,000. In the last week alone, Bitcoin's value has increased by almost 15%.

CoinShares' report highlights that this sentiment is contrary to the prevailing trend in the wider cryptocurrency market. The report suggests that the trend may be driven, at least in part, by the need for liquidity during the current banking crisis. A similar pattern was observed during the initial wave of COVID-19 panic in March 2020.

In the last week, Ethereum saw a net outflow of $13 million, but there was a turnaround with inflows of $1.3 million. CoinShares believes that the recent inflows into funds related to Ethereum, prompted by optimistic market sentiment, reinforce the theory that the outflows from Bitcoin were due to the investor demand for liquidity.