Experts at CoinShares have reported a substantial outflow of funds from cryptocurrency investment products, totaling $435 million for the week spanning April 22 to April 26, 2024. This figure represents the most significant withdrawal since March of this year, highlighting a continuing three-week trend of capital reduction primarily associated with the activities of ETF issuers.
Grayscale Investments has been the principal driver behind this trend, recording a staggering $440 million in withdrawals. While the outflow from Grayscale has somewhat decelerated, other issuers have seen a drop in inflows. Just last week, these amounted to a mere $126 million—a stark contrast to Grayscale's massive withdrawals.
Previously, there were no capital inflows to the spot Bitcoin ETF by BlackRock for two consecutive days, ending a continuous influx that had lasted for 71 days. On the other hand, the bulk of funds withdrawn from the market still originates from Grayscale Investments, which has seen a significant reduction in its asset base.
ProShares, another investment product firm, also demonstrated a considerable outflow, with $46 million leaving its funds. Regarding asset distribution, Bitcoin and Ethereum-based products led the outflows with $423 million and $38.4 million, respectively. However, certain altcoins like Solana, Litecoin, and Chainlink witnessed an influx of investments, indicating a selective investor interest in these assets.
On a regional level, the United States leads with the highest capital outflow of $388 million, followed by Canada at $32.1 million and Germany at $15.8 million. Despite these outflows, the U.S. continues to dominate in terms of overall capital attraction. Since the beginning of 2024, investment products in the U.S. have attracted a total of $13.6 billion.
Jan van Eck, CEO of VanEck, recently commented on the regulatory environment, suggesting that the approval of spot Ethereum ETFs by May is unlikely. He attributed his outlook to the U.S. Securities and Exchange Commission's (SEC) lack of responsiveness to the applications from potential issuers, underscoring the ongoing challenges within the regulatory landscape of the cryptocurrency market.
