Crypto Market Sees Outflows Totalling $9.7M in First Week of 2023

-CoinShares reported that digital asset investment products saw outflows totalling $9.7 million in the first week of 2023.
-Bitcoin saw minor outflows, totalling $6.5 million while Ethereum posted outflows of $3 million during the first week of 2023.
-Germany and Switzerland saw minor inflows of $0.6 million and $0.8 million respectively.

Despite the shockwaves from the FTX and Alameda implosion carrying on to the new year, CoinShares reported that digital asset investment products saw outflows totalling $9.7 million in the first week of 2023. The report noted that the trading volume on crypto assets is significantly reduced, which may affect exchanges‘ liquidity in the long run. Notably, Bitcoin saw minor outflows, totalling $6.5 million while Ethereum posted outflows of $3 million during the first week of 2023. On a more positive note, XRP saw record inflows of $3 million, despite the overall negative sentiment in the crypto market.

Regionally, Germany and Switzerland saw minor inflows of $0.6 million and $0.8 million respectively. Brazil and the United Kingdom saw no flows throughout the week. Therefore, the overall sentiment of the crypto market remains negative, but the outflows in the first week of 2023 were lower than last year’s, which preceded the 2021 bull market.

Moreover, crypto exchanges accrue profits from trading fees collected daily. Despite the arrest and investigation of SBF, cryptocurrency investors have not fully regained confidence in the industry for the past three weeks. This is evidenced by the low trading volumes, with Bitcoin averaging US$5bn a day during the week compared to US$9bn during 2022, while exchange-traded products averaged US$173m per day.

Therefore, while the crypto market sentiment remains uncertain, XRP’s record inflows of $3 million may be a sign of a potential recovery in the near future. Nevertheless, with the uncertainty in the crypto market, investors should take extra caution when investing in digital assets.