Key Points
- Crypto investment products experienced outflows of $206 million, with Bitcoin and Ethereum seeing the most significant declines.
- Litecoin and Chainlink outperformed Bitcoin due to Bitcoin halving and speculation around interest rates.
Crypto investment products saw a significant outflow of $206 million last week, as reported by CoinShares. The majority of these outflows were from Bitcoin, which accounted for $192 million, and Ethereum, which accounted for $34.2 million.
However, altcoins like Litecoin and Chainlink saw substantial inflows during the same period. According to data, Litecoin had inflows of $3.2 million, while Chainlink recorded $1.7 million.
Reasons for Outflows
The report suggested that the outflows were mainly due to concerns about the impact of the fourth Bitcoin halving, which occurred on 19th April. Investors were apprehensive about the effect on miners and decided to stay off Bitcoin, potentially returning once the market stabilizes.
Another reason for the increased inflows into Litecoin and Chainlink could be related to interest rates. There have been speculations that the Federal Reserve will maintain high interest rates, which has reduced investors’ appetite for riskier assets.
Price Performance
The price performance of Litecoin and Chainlink could also have influenced the surge in inflows. At the time of reporting, Litecoin was trading at $84.89, a 3.97% increase over the last seven days, while Chainlink saw a price increase of 6.18%.
In contrast, the top two cryptocurrencies, Bitcoin and Ethereum, lagged behind. If their prices continue to underperform, the inflows for the next week might also be negative.
Volume data for Litecoin and Chainlink shows a decrease from the previous week, but there have been slight increases in the last 24 hours. For Chainlink, this could trigger a further uptrend in its price. However, for Litecoin, the increasing volume could strengthen the downtrend in its price.
In a related development, CoinShares suggested that Bitcoin miners might shift their focus to AI due to the halved rewards potentially not covering miners’ expenses. Companies like BitDigital, Hive, and Hut 8 have already started generating income from AI.
