Cryptocurrency investors withdrew more than $1.2 billion from the market

In the past two weeks, the exchange-traded Bitcoin-ETF in the US and other crypto assets worldwide have seen an increase in outflows, totaling 1.2 billion US dollars (1.12 billion euros) according to a report by market researchers CoinShares. This outflow has led to a downward trend in particular for Bitcoin, as the market has turned pessimistic about potential US interest rate cuts.

Following a drop in price to just under 59,700 dollars, many investors took advantage of the lower price on Tuesday to enter the crypto market, causing the Bitcoin price to temporarily rise above 62,000 dollars again. The overall negative mood in the crypto market is attributed to investors’ concerns about potential interest rate cuts by the US Federal Reserve, with uncertainty around when and to what extent the central bank might adjust its monetary policy.

This pessimism is driven by the idea that while interest rates remain high, investors have other profitable investment options, causing a downturn for the crypto market. However, if interest rates on traditional investments decrease, cryptocurrencies may become more attractive to investors.

The recent outflows from the crypto market have mainly focused on Bitcoin, with investors withdrawing a total of 630 million dollars in the past two weeks. Despite this negative sentiment, researchers at CoinShares do not expect a sustained slump in the medium to long term for Bitcoin, as investors have not increased their short positions betting on a falling Bitcoin price.

The second largest cryptocurrency, Ether on the Ethereum blockchain, has also experienced outflows of 58 million dollars and has not escaped the overall negative sentiment in the market.