Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows

Purpose Investments recorded the largest inflows yet again while the discount on Grayscale’s Bitcoin Trust (GBTC) hit a new low of 21.36%.


Last week, digital asset investment products posted outflows of $142 million, the first one after 17 weeks of inflows, according to data from CoinShares.

Still, these outflows represented only 0.23% of total assets under management (AUM). From a historical perspective, the latest inflows are small relative to the outflows in early 2018, where week's outflows represented up to 1.6% of AUM.

For the week ending December 17, the crypto asset products recorded the largest weekly outflow on record after the previous record in early June in 2021, where weekly outflows were $97 million.

While appearing to be alarming, James Butterfill, investment strategist at CoinShares, further noted that these outflows come at a time when outflows have been recorded across all risk assets following the recent US Federal Reserve statement on doubling the pace of tapering and projecting three rate hikes in 2022.

“This trend break very accurately depicts the tax selling, redemption, and bonus clipping flow,” said Zaheer Ebtikar of Deribit Insights. Once this selling abates, we could see the “Santa Rally,” just like in December 2020 when in the first two weeks, the price dropped 10% only to rally 50% in the year-end.

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Additionally, these outflows come at a time when yearly inflows are at a record high at $9.5 billion, beating the $6.7 billion inflows in 2020.

Out of these outflows, Bitcoin (BTC) accounted for $89 million, well below the June outflows of $150 million. Ethereum (ETH) meanwhile saw record outflows of $64 million. BTC 1.97% Bitcoin / USD BTCUSD $ 21,412.58
$421.831.97%
Volume 24.76 b Change $421.83 Open $21,412.58 Circulating 19.08 m Market Cap 408.48 b
5 mon SEC Commissioner says NFTs Might Fall Within Their Jurisdiction, Gensler Hires Senate Aid for Crypto Policy 5 mon A Possible Crypto Recovery Moving Into New Year, Risk-on Sentiments Send The Stock Market to Another Record High 5 mon Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum
ETH 6.31% Ethereum / USD ETHUSD $ 1,226.85
$77.416.31%
Volume 16.51 b Change $77.41 Open $1,226.85 Circulating 121.3 m Market Cap 148.81 b
5 mon Coinbase Predicts Substantial Growth of Newer L1 Chains & Institutionalization of Regulated DeFi 5 mon A Possible Crypto Recovery Moving Into New Year, Risk-on Sentiments Send The Stock Market to Another Record High 5 mon The Sandbox Game Is Migrating to Ethereum Sidechain Polygon and Launching A DAO in 2022

Amidst these outflows, altcoins like Solana (SOL), Polkadot (DOT), and multi-asset investment products still managed to record inflows of $6.7 million, $2.5 million, and $1.5 million respectively. Cardano (ADA) and XRP also saw some inflows at $0.5 million and $0.3 million respectively. SOL 8.74% Solana / USD SOLUSD $ 41.94
$3.678.74%
Volume 1.69 b Change $3.67 Open $41.94 Circulating 342.64 m Market Cap 14.37 b
5 mon Coinbase Predicts Substantial Growth of Newer L1 Chains & Institutionalization of Regulated DeFi 5 mon Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum 6 mon Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows
DOT 2.87% Polkadot / USD DOTUSD $ 8.22
$0.242.87%
Volume 428.23 m Change $0.24 Open $8.22 Circulating 987.58 m Market Cap 8.12 b
6 mon Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows 6 mon SBI Holdings to Launch Japan’s First Crypto Fund; Including BTC, ETH, DOT, LINK, LTC, XRP & BCH 6 mon Solana Unaffected by Price Jitters while Bitcoin, Ether, Polkadot, and Cardano Post Outflows
ADA 0.96% Cardano / USD ADAUSD $ 0.50
$0.000.96%
Volume 784.78 m Change $0.00 Open $0.50 Circulating 33.93 b Market Cap 17.03 b
5 mon Bitcoin Is Back Above $51k and Ether $4,100 as The Cryptocurrency Market Goes Green 6 mon Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows 6 mon Solana (SOL) Bucks the Trend, Along With Tron (TRX), by Recording Highest Inflows After Bitcoin (BTC): Report
XRP -2.71% XRP / USD XRPUSD $ 0.37
-$0.01-2.71%
Volume 1.51 b Change -$0.01 Open $0.37 Circulating 48.34 b Market Cap 17.86 b
6 mon Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows 6 mon SBI Holdings to Launch Japan’s First Crypto Fund; Including BTC, ETH, DOT, LINK, LTC, XRP & BCH 6 mon Ledger Announces Integration with FTX and Coinbase, Launching Crypto Life Debit Card

While Tron (TRX) and Litecoin (LTC) didn’t see any flows, Binance did have some outflows of $0.8 million. TRX 1.38% TRON / USD TRXUSD $ 0.07
$0.001.38%
Volume 563.25 m Change $0.00 Open $0.07 Circulating 92.5 b Market Cap 6.06 b
6 mon Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows 6 mon Justin Sun Stepping Down from Tron (TRX) Leadership To Be A Diplomat For Grenada 6 mon Solana (SOL) Bucks the Trend, Along With Tron (TRX), by Recording Highest Inflows After Bitcoin (BTC): Report
LTC 1.60% Litecoin / USD LTCUSD $ 56.76
$0.911.60%
Volume 564.52 m Change $0.91 Open $56.76 Circulating 70.58 m Market Cap 4.01 b
6 mon Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows 6 mon SBI Holdings to Launch Japan’s First Crypto Fund; Including BTC, ETH, DOT, LINK, LTC, XRP & BCH 6 mon Ledger Announces Integration with FTX and Coinbase, Launching Crypto Life Debit Card

Like last week, Purpose Investments launched the first Bitcoin ETF, and then Ether ETF in Canada, recorded the largest inflows while CoinShares, ProShares, ETC Group, and 3iQ all recorded outflows.

Grayscale, the largest digital asset manager, still hasn’t seen any inflows. And as the SEC postponed the decision on the firm’s application to convert its Bitcoin Trust to an ETF in early February, GBTC hit a new low of 21.36%.

Still, according to a recent CNBC Millionaire Survey, most millennial millionaires have the bulk of their wealth in crypto and are planning to add more next year.

A whopping 83% of them own crypto, as per the survey which polled those with investable assets of $1 million or more. 53% of these millennial millionaires have at least half of their wealth in crypto.

In comparison, more than three-quarters of Gen X investors do not own any crypto assets, while only 4% of baby boomers hold them.

Despite the ongoing lack of bullish price action in the market, millennial millionaires have no plans to reduce their crypto allocation; rather, 48% of them plan to add to their holdings next year—another 39% plan to maintain their current crypto levels. Only 6% of millennial millionaires plan to reduce their crypto investments over the next 12 months.

“I’m not sure the wealth management industry has recognized that they really need to think of these as completely different generations,” said George Walper, president of Spectrem Group, which conducted the survey. “Most firms were hoping to ignore it. But millennial millionaires are not going to just ‘grow out’ of crypto.”

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