Bitcoin and Solana help break 6-week streak of outflows from digital asset funds

(Kitco News) – Flows into digital asset investment products foreshadowed Monday’s price spike in Bitcoin (BTC) and the broader cryptocurrency market as a total of $21 million flowed into various funds in the week ending Sept. 29, breaking a 6-week streak of outflows.

According to the latest digital asset fund flows report from CoinShares, things were shaping up for another week of outflows until a spike in inflows late in the week lifted the metric into positive territory.

“Earlier in the week it looked as if it would be another week of outflows, with the inflows coming late in the week (Friday) in what we believe is a reaction to a combination of positive price momentum, fears over US government debt prices and the recent quagmire over government funding,” said James Butterfill, head of research at CoinShares.

Digital asset fund flows. Source: CoinShares

Despite the rising prices, Butterfill said “volumes remain seasonally low in both the investment product market and the broader crypto market.”

There were notable differences based on geographical region, with U.S. products seeing outflows totaling $19 million while Europe and Canada saw inflows of $23 million and $17 million, respectively.

Flows by country. Source: CoinShares

Bitcoin accounted for the majority of inflows with $20 million worth of new investment while short-Bitcoin products saw $1.5 million in outflows, “bringing outflows since April to US$85m,” Butterfill said.

Flows by asset. Source: CoinShares

Activity for the altcoins was relatively muted aside from Solana, which saw inflows of $5 million. This marked “its 27th week of inflows and just 4 weeks of outflows this year, highlighting it as the most loved altcoin this year,” Butterfill said. “Ethereum saw outflows for a 7th consecutive week, totaling US$1.5m, marking it as the least loved altcoin.”

Blockchain equities saw outflows of $8.4 million, which fell in line with a broader sell-off in the technology sector, he said.

Data provided by Coinglass shows that a total of $92.82 million worth of short positions and $41.15 million of long positions were liquidated after the U.S. Congress agreed to a temporary 45-day debt ceiling deal on Sunday.

Total crypto liquidations. Source: Coinglass

Despite the turnaround in fund flows and the spike in Bitcoin price over the past 24 hours, the Crypto Fear & Greed Index is still in neutral territory as investors remain cautious due to mounting economic headwinds that threaten the stability of all financial markets.

Crypto Fear & Greed Index. Source: Alternative