Outflows from investment funds backed by Bitcoin (BTC) rose sharply last week, despite a massive increase in the spot price of the cryptocurrency.
The outflows from bitcoin funds for the week reached $112.8 million, marking slightly improved investor sentiment compared to the week before when $243.5 million left BTC-backed funds, according to new report from CoinShares.
Interestingly, the outflows from bitcoin funds happened as short-bitcoin funds – funds that make money when bitcoin prices fall – saw record inflows of $35 million for the week.
Meanwhile, funds backed by Ethereum’s native token ETH saw outflows of $12.7 million last week, a slight worsening from the $11 million of outflows seen the week before.
In total for the digital asset space, the net outflows came in at $95 million, helped by inflows into the mentioned short-bitcoin funds and funds backed by other altcoins, including Litecoin (LTC), Solana (SOL), Polygon (MATIC) and XRP.
The week marked the sixth consecutive week of outflows from both bitcoin funds specifically and from crypto funds more broadly.
Explaining the outflows, which stood in sharp contrast to the generally bullish sentiment in the crypto market, CoinShares suggested that it could be due to a need for liquidity by large market players.
“It is evident this sentiment is contrarian relative to the rest of the crypto market, but it may be driven, in part, by the need for liquidity during this banking crisis, a similar situation was seen when the COVID panic first hit in March 2020,” the report said.
It added that inflows into altcoin-backed funds gives “further credence to the notion that the outflow in the larger crypto assets was driven by the need for liquidity.”
The spot Vitcoin price rose by a respectable 27% last week, ending the week at a price of $27,973.
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