Digital Asset Investment Products. In the midst of the recent sell-off by Mt. Gox and the German government, investors have poured $441 million into digital asset investment products. This is according to a CoinShares report from Monday, which stated that while exchange-traded product (ETP) volumes remained relatively low at $7.9 billion for the week, in line with the typical seasonal pattern of lower volumes during the summer months, inflows into digital asset investment products have remained strong. However, ETPs’ participation rate in the overall market for trusted exchanges was 17% lower.
The US Leads in Terms of Inflows
The United States recorded the majority of inflows, with $384 million. However, other countries such as Hong Kong, Switzerland, and Canada also witnessed opportunistic buying, with inflows of $32 million, $24 million, and $12 million, respectively. Germany, on the other hand, experienced outflows of $23 million.
According to CoinShares, digital asset investment products saw $441 million in inflows last week, with recent price weakness triggered by Mt. Gox and selling pressure from the German government likely seen as a buying opportunity. Bitcoin inflows amounted to $398. While Bitcoin attracted inflows of $398 million, representing 90% of the total inflows, investors also diversified their investments across a broader range of altcoins.
Notably, Solana received $16 million in inflows last week, bringing its year-to-date (YTD) inflows to $57 million, making it the best-performing altcoin in terms of flows. Ethereum sentiment appears to have turned positive, with $10 million in inflows, although it remains the only ETP to have seen net outflows YTD.
However, blockchain equities have not mirrored this sentiment, experiencing further outflows of $8 million last week, bringing the year-to-date outflows to $556 million. The inflows also come as spot Bitcoin ETFs in the US experienced a significant influx of investments last week. On July 6, the funds recorded $143 million in net inflows, reflecting the highest amount since early June.
Mt. Gox Selling Pressure Impacts Bitcoin Price
Earlier this month, Fineqia International research analyst Matteo Greco noted how the selling pressure from miners and Mt. Gox contributed to the Bitcoin price drop. With a weekly closing price of around $55,850, Bitcoin fell 11% from the previous week. As the week progressed, heavy selling pressure was noticeable; Bitcoin’s price dropped to $53,500, then recovered to $58,250, and finally settled at $55,850. The daily BTC on-chain volume is $41.1 billion, and the weekly volume is about $288 billion, both of which are in line with the year-to-date average.
According to Greco, the latest halving and the beginning of Mt. Gox repayments have both contributed to increased on-chain selling pressure. Miners have also been selling at a steady rate. According to reports, the current sell-off in the Bitcoin market has placed Bitcoin miners in a critical phase known as “capitulation” as their profits decline. Capitulation by miners happens when miners cut back on operations, sell off some of their mined Bitcoin and reserves to make yield, hedge their Bitcoin exposure, or just stay afloat.
