Bitcoin investment products and funds registered outflows for a second consecutive week, according to data from digital asset manager CoinShares released on Monday, highlighting investors' cautious sentiment on the cryptocurrency sector as prices continued to stall.
Bitcoin outflows hit $10.4 million (roughly Rs. 77 crores) in the week ended July 16, after outflows of $6.9 million (roughly Rs. 50 crores) the previous week. For the month of July, Bitcoin outflows amounted to $15 million (roughly Rs. 110 crores), though inflows for the year were still a robust $4.2 billion (roughly Rs. 31,450 crores). Bitcoin price in India stood at Rs. 22.2 lakhs as of 10:30am IST on July 20.
The overall cryptocurrency sector had net inflows of $2.9 million (roughly Rs. 20 crores) in the latest week, data showed.
The world's largest cryptocurrency in terms of market capitalisation was down 12.1 percent in price this month. On Monday, it was testing a key support of $30,000 (roughly Rs. 22 lakhs) and was last down 3.4 percent at $30,694 (roughly Rs. 22.9 lakhs).
"Bitcoin is looking precarious and is trading lower alongside global markets as concerns of economic recovery rise," said Pankaj Balani, chief executive officer at derivatives trading platform Delta Exchange.
"The volatility has also started to spike up... We can see sharp moves on the downside if bitcoin breaks below $30,000 (roughly Rs. 22 lakhs) convincingly," he added.
That said, James Butterfill, investment strategist at CoinShares, pointed out that Bitcoin outflows last week were minimal relative to May and June this year. He also believes that the timing of some of the crypto investment product launches, in which investors gained access for the first time, has led to recent profit-taking.
Ether-based investment products and funds, the token used for the Ethereum blockchain, had $11.7 million (roughly Rs. 87 crores) in net inflows last week. So far this year, ether inflows were close to $1 billion (roughly Rs. 7,490 crores). Ethereum price in India stood at Rs. 1.29 lakhs as of 10:30am IST on July 20.
Ether's price, however, was down 20 percent against the US dollar, and was last 4 percent weaker at $1,819 (roughly Rs. 1.3 lakhs).
Grayscale remains the largest crypto asset manager, but has seen its assets under supervision slide further, to $27.681 billion (roughly Rs. 2,07,220 crores).
CoinShares, the second-biggest digital asset manager, saw its AUM dip to $3.1 billion (roughly Rs. 23,200 crores) from $3.3 billion (roughly Rs. 24,700 crores) the previous week.
© Thomson Reuters 2021