Crypto-Related Funds Witnesses Slow Down of Money Outflow

A Bloomberg report has shown that the third quarter 2022 witnessed a slowdown of money flowing out from crypto-related funds.

The slowdown may be an indication that some investors have already stopped investing in risky assets, according to the report.

Bloomberg Intelligence collected data that showed $17.6million was taken out by crypto-exchange-traded fund investors in the three month period ending September 30, according to Bloomberg Intelligence.

This number was lower than the record $683.4million that had been withdrawn from these funds during the second quarter, according to data analysis.

The report stated that the last two months saw the largest outflows. Investors poured in more than $200million into crypto ETFs during July.

Due to plummeting cryptocurrency prices, the high level of outflows during the second quarter was a result. The world’s largest digital asset based on market value, BitcoinThe cryptocurrency fell almost 60% in the second quarter 2022, and reached a record low of $17785 on June 18. The cryptocurrency gained 3.7% during the third quarter.

According to the report, narrower price fluctuations coincided with lower crypto-linked ETF inflows in the third trimester. Bitcoin was trading at $19,400 as of Sep 30, which is close to its price at the beginning.

Todd Sohn, ETF strategist at Strategas Securities, told Bloomberg, “I wonder if the second quarter was the ‘get me out part of these funds.” 

He said that third quarter was a tough quarter for investors, with “some laggards” who were just waiting for crypto to rebound.

The global central banks all over the globe have raised interest rates to stop inflation soaring. Global banks have fallen in the last few months and risky investments such cryptocurrencies have been affected by rising recessionary fears.

“Everything’s more correlated right now,” Stephane Ouellette, chief executive officer of FRNT Financial Inc. – a crypto brokerage firm – told Bloomberg. 

He said that the ETF’s buyers are in the exact same situation as those who own Bitcoin. “Everyone’s panicking, so they’re acting the same.”

Source: Shutterstock



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