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Ethereum Experiences $300 Million Monthly Crypto Fund Outflows – What’s Going On?

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Ethereum, the world’s second-largest cryptocurrency, is facing a challenging year as institutional investors have been rapidly shedding their holdings. In a surprising turn of events, ETH has experienced significant outflows from institutional investors in 2023, with sales reaching over $108 million year-to-date.

This staggering figure marks Ethereum as the most sold digital asset among large entities, raising questions about its future performance and investor sentiment.

According to data from leading digital asset management firm CoinShares, digital asset investment products witnessed outflows of $59.3 million in the past week alone. This adds to a troubling trend, with nearly $300 million in total outflows over the last four weeks.

ETH, in particular, has fallen out of favor with institutional investors, earning the title of the “least loved digital asset amongst ETP investors this year,” as noted by CoinShares research head James Butterfill in a recent report.

Institutional Exodus And Dwindling Ethereum Sentiment

Butterfill pointed to the gloomy sentiment surrounding Ethereum and attributed it to ongoing concerns over regulatory scrutiny and the recent strength of the US dollar.

He said:

“We believe continued worries over-regulation of the asset class and recent dollar strength are the most likely reasons for this.”

The timing of these outflows is also noteworthy, mirroring the period of heightened regulatory uncertainty that led to short bitcoin inflows in March.

Bitcoin investment products, too, faced a tumultuous week, with outflows totaling nearly $69 million. In a surprising twist, short bitcoin funds saw a substantial influx of a little over $15 million, marking the largest single week of inflows for this product since March.

The contrasting fortunes of Bitcoin and short Bitcoin funds suggest that investors are seeking alternatives in the cryptocurrency space amids

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Author: Christian Encila

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