Bitcoin’s halving fails to stem $206 million outflows as investors shift to altcoins like Polkadot Bitcoin’s halving fails to stem $206 million outflows as investors shift to altcoins like Polkadot
Analysts explained that the current outflow trend was being influenced by the high interest rate fears.
2 min read
Updated: Jul. 8, 2024 at 11:40 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto-related investment products saw their second consecutive week of outflows in April, with roughly $206 million leaving the market, per CoinShares‘ recent weekly report.
Despite Bitcoin’s recent halving, which typically generates excitement in the market, investor interest in the leading digital asset remained subdued, evidenced by outflows totaling $192 million.
Conversely, short-term investors seized the opportunity presented by the halving event to strengthen their positions, injecting $300,000 into the market.
What is fuelling the outflows?
During the past week, CryptoSlate reported that US-based Bitcoin (BTC) exchange-traded funds (ETFs) experienced five consecutive days of outflows. These outflows were primarily driven by Grayscale’s GBTC, ProShares BITO, and Ark 21 Shares’ ARKB.
James Butterfill, the Head of Research at CoinShares, elucidated that these outflows signify a dwindling interest among ETP/ETF investors. The trend stems from speculations that the Federal Reserve may choose to delay rate cuts further.
Additionally, Butterfill pointed out a parallel decline in trading volumes of ETPs, which clocked in at $18 billion last week. He emphasized that these volumes now represent a lesser share of total BTC volumes, marking a shift from 55% a month ago to 28%.
Altcoins draw interest
Investors are increasingly favoring lesser-known altcoins over major cryptocurrencies like Solana and Ethereum.
According to the report, altcoins such as Chainlink, Polkadot, Litecoin, Cardano, and XRP collectively attracted over $7 million in inflows last week.
Meanwhile, Ethereum has continued its downward trend, with last week marking the sixth consecutive week of outflows totaling $34 million. Its month-to-date flow remains negative at $85 million, with a year-to-date flow also in negative territory, amounting to $11 million.
Solana experienced more modest outflows of $300,000, while blockchain equities recorded their 11th consecutive week of outflows, reaching $9 million.
Butterfill attributed the outflows from blockchain equities to investor concerns regarding the impact of mining halving on mining companies.
Disclaimer: CryptoSlate has received a grant from the Polkadot Foundation to produce content about the Polkadot ecosystem. While the Foundation supports our coverage, we maintain full editorial independence and control over the content we publish.
Mentioned in this article
Bitcoin 
Ethereum 
Solana 
Polkadot 
Chainlink 
CoinShares 
Grayscale Investments 
Grayscale Bitcoin Trust 
ARK 21Shares Bitcoin ETF Author 
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,138.16
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Solana
$238.507
Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
Polkadot
$5.71159
Polkadot development is on track to deliver the most robust platform for security, scalability, and innovation.
Chainlink
$14.4404
Chainlink is a decentralized oracle network that connects smart contracts on the blockchain to real-world data.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
The Grayscale Bitcoin Trust (GBTC) is a digital currency investment product that provides investors with access to Bitcoin through traditional investment channels.
The ARK 21Shares Bitcoin ETF (ARKB) is a digital asset ETF that seeks to track the performance of bitcoin, as measured by the performance of the CME CF Bitcoin Reference Rate – New York Variant (the “Index”).