XRP Experience Significant Crypto Outflows as Recession Concern Mount
The cryptocurrency market experienced a significant sell-off, particularly with Bitcoin (BTC) seeing a withdrawal of $400 million following five weeks of consecutive inflows. This reflects growing concerns among investors regarding a potential market collapse.
Ethereum Rapid Withdrawal
Ethereum (ETH) also faced substantial withdrawals totalling $146 million, likely impacted by the launch of Ethereum ETFs in the U.S., which saw net outflows of $170 million. Although newly launched U.S. ETFs reported $430 million in positive inflows, they were overshadowed by a $603 million outflow from existing Grayscale trust funds.
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Exchange-Traded Products (ETPs) saw a decrease in trading volume to $14.8 billion, representing 25% of the total market, below the average level. The Assets Under Management (AUM) of ETPs dropped by $10 billion since the previous week’s market close due to recent price corrections.
From a geographical perspective, the U.S. witnessed the highest outflows of $531 million, with Germany and Hong Kong also reporting significant outflows of $12 million and $27 million, respectively. Conversely, Canada and Switzerland saw inflows of $17 million and $28 million, respectively. Short-term Bitcoin investment products recorded their first measurable inflow of $1.8 million since June, indicating a rising bearish sentiment about Bitcoin’s near-term price outlook among investors.
Blockchain stocks experienced an $18 million outflow, aligning with a wider sell-off in tech-focused ETFs, likely driven by heightened recession fears. Goldman Sachs recently increased the probability of a U.S. recession next year from 15% to 25%, contributing to the elevated risk perception prompting investors to reassess their holdings in risky assets, including cryptocurrencies.
Final Thought
In conclusion, the week was challenging for the crypto markets due to substantial asset outflows and investor anxiety concerning economic and geopolitical uncertainties. These events underscore the volatility inherent in digital assets and emphasize the importance of staying informed and exercising caution in a rapidly evolving market landscape.
Read Also: Bitcoin (BTC) Takes a Dive Below $60K as Market Turmoil Hits
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Meet Daniel Abang: Crypto guru, content creator, and analyst. With a deep understanding of blockchain, he simplifies complex concepts, guiding audiences through the ever-changing crypto landscape. Trusted for his insightful analysis, Daniel is the go-to source for staying informed and empowered in the world of cryptocurrency.
