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Recent data from CoinShares points to a significant shift in investor sentiment regarding Bitcoin, marked by a substantial $544.1 million net outflow from US spot Bitcoin ETFs in the last week.
According to James Butterfill, a leading analyst at CoinShares, this significant amount of outflow highlights a “true correction is underway” as this trend extends beyond a single week, with a total of over $1.1 billion flowing out in the past two weeks alone.
Global Outflows Amidst Economic Uncertainty
James Butterfill attributes this withdrawal to a lack of confidence among investors regarding anticipated interest rate cuts. Commenting on the consistent outflows, Butterfill noted:
We believe this is in reaction to the pessimism amongst investors for the prospect interest rate cuts by the FED this year.
Notably, the US was not alone in experiencing these outflows; significant sums were also withdrawn from funds based in Canada, Germany, and Hong Kong. Contrarily, funds based in Brazil and Switzerland witnessed net inflows, indicating a varied global response to the current economic climate.
While Bitcoin faced the brunt of the withdrawals, Ethereum also saw notable outflows, with $58 million leaving Ethereum-based investment products globally. This occurred despite the anticipation surrounding new issuers’ S-1 registration filings with the SEC, hinting at potential launches.
However, not all cryptocurrencies suffer from these conditions. Altcoins such as Solana, Litecoin, and Polygon experienced net inflows, suggesting that some investors are viewing the current market weaknesses as potential buying opportunities, according to Butterfill.
Bitcoin Market Turbulence and Optimistic Forecasts
Amidst these financial shifts, the broader crypto market has felt the impact, with Bitcoin’s price falling by 4.7% in the past 24 hours and 6.6% over the past week, currently trading at around $61,186. This downturn has had a cascading effect on traders, with significant liquidations occurring in the market.
According to amounting to $308.97 million. Of this, Bitcoin traders alone faced $123.35 million in losses.
Amid market volatility, Jack Mallers, CEO of Strike, a global Bitcoin application, maintains a bullish outlook on Bitcoin’s future.
In discussion with analyst Scott Melker, Mallers expressed confidence that despite current price fluctuations, Bitcoin could reach between $250,000 and $1 million in the coming cycle.
He attributes this potential growth to the ongoing dollar depreciation and sees Bitcoin as a robust hedge against currency debasement.
Featured image created with DALL-E, Chart from TradingView
