Stronger than expected macro data pushes US investors to short Bitcoin

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Stronger-than-Expected Macro Data Pushes US Investors To Short Bitcoin Stronger-than-Expected Macro Data Pushes US Investors To Short Bitcoin
Stronger-than-Expected Macro Data Pushes US Investors To Short Bitcoin

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Cover art/illustration via Cryptooshala

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The cryptocurrency industry is yet to emerge from a period of high volatility as asset outflows remain the dominant market trend.

Despite its slowly rising price, bitcoin saw outflows for the third week in a row. data from coinshare showed that there were total outflows of $12 million last week – while inflows reached $10 million.

weekly asset flow
Graph showing weekly crypto asset flows in US dollars (source: Coinshare)
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While $2 million in outflows is not significant, the amount of inflows is. The entirety of $10 million in inflows were in digital asset investment products shorting bitcoin.

bitcoin outflow
Graph showing weekly crypto asset flows by asset in US dollars (source: Coinshare)

Ethereum remained intact – only seeing an outflow of $200,000 in the past week – while Polygon (MATIC), Solana (SOL) and Cardano (ADA) saw modest inflows.

bitcoin outflow asset
Chart showing the flow of assets in US dollars (source: Coinshare)

The increase in short-Bitcoin flows can be attributed to an increase in negative sentiment among US investors, with the country increasingly nervous after the iconic FOMC meeting last week, as the Federal Reserve released more macro data than expected. .

outflow by country
Chart showing exchange flows in US dollars by country (source: Coinshare)

The stark difference between the outflows observed in the US and the rest of the world can be attributed to the US market’s sensitivity to regulatory action. Less regulated markets are less likely to see significant outflows or an increase in short positions following announcements or enforcement from government agencies.

This is evident in blockchain shares – a regulated product available to investors in the US and Canada. The negative sentiment affected them as well, leading to outflows of $7.2 million.

Since peaking in November 2021, publicly listed blockchain companies have become increasingly sensitive to broader market movements. Most publicly listed blockchain companies focus on growth – which means that even minor changes in interest rates leave them vulnerable and prone to volatility.

ETP exits bitcoin
Chart showing flows by blockchain equity ETP (source: CoinShares)
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