Outflows from bitcoin (BTC)-backed investment funds surged last week, despite a significant rise in the cryptocurrency’s spot price.
According to the new report CoinShares, outflows from bitcoin funds for the week reached $112.8 million, indicating a slight improvement in investor sentiment compared to last week, when $243.5 million left BTC-backed funds.
Interestingly, the outflows from bitcoin funds came as short bitcoin funds – funds that make money when bitcoin prices fall – saw record inflows of $35 million for the week.
Meanwhile, funds backed by Ethereum’s own token ETH , saw $12.7 million in outflows last week, down slightly from the $11 million outflow seen a week earlier.
Overall, the digital asset space posted net outflows of $95 million, driven by inflows into the aforementioned short bitcoin funds and funds backed by other altcoins, including Litecoin (LTC), Solana (SOL), Polygon ( MATIC ) and XRP .
The week marked the sixth consecutive outflow from both bitcoin funds and crypto funds in general.
Explaining the outflow, which was in stark contrast to the generally positive sentiment in the cryptocurrency market, CoinShares suggested that it could be due to the need for liquidity by major players in the market.
“Obviously, this sentiment is at odds with the rest of the crypto market, but it may be partly driven by the need for liquidity during this banking crisis. A similar situation was observed when the panic over COVID-19 first arose in March 2020. “, the message says.
It added that the influx of funds into altcoin-backed funds lends “further credence to the idea that the outflow of large crypto assets was driven by the need for liquidity.”
Last week, the spot price of Bitcoin rose by 27%, ending the week at $27,973.