Based on most latest CoinShares research, last week investors withdrew a staggering $726 million from Bitcoin investment products.
This has been among the worst weeks for the Bitcoin market as more money runs from the market since March 2024. Mostly driven by general economic concerns, the September 9 report shows that the world of cryptocurrencies is still highly unstable and unpredictable.
According to a fresh Coin Shares analysis, last week investors pulled out a massive $726 million from Bitcoin investment products. Since March 2024, the bitcoin market has lost most value.
For the market, this has been among the worst of weeks. Published on September 9, this analysis reveals how still quite unstable and unclear the crypto scene is. This is primarily the result of the state of the economy generally.
James Butterfill, head of studies at CoinShares, claims that last week crypto products lost $942 million overall. The most money lost from the week of March 17–23, 2024. $643 million was withdrawn from Bitcoin-based investments after the market collapsed lately.
Products developed on Ethereum also cost $98 million lost. Against the trend, Solana-based products attracted $6.2 million even when money was leaving the market overall.
People are losing faith in the decisions made by the U.S. Federal Reserve about interest rates, hence there is a demand for selling cryptocurrencies right now. Given the overall state of the economy was stronger than projected last week, there has been discussion regarding possible Fed rate reduction by 25 basis points (bps).
Though fewer employment in the United States were recorded later in the week, this has made people more likely to assume a larger 50 bp cut, which might have significant impact on the crypto market.
Crypto Analyst Leena ElDeeb On Bitcoin’s Potential
Leena ElDeeb, an analyst at 21Shares, said that the latest job market data in the U.S. was a “moment of truth” for risky assets like Bitcoin.
“A rate cut bodes well for risk-on assets, which have historically benefited from an expansion in investor appetite as borrowing costs decrease,” ElDeeb said. She also said that other things, like the amount of cash held by central banks around the world, could be very important to Bitcoin’s comeback.
Usually, ElDeeb noted, Bitcoin reaches its lowest point just before the world M2, a gauge of the money supply. Following this, the price often rises swiftly, quicker than the expansion in liquidity. This suggests that, should like patterns persist, Bitcoin may show a significant comeback.
Problems on the crypto market have not limited their nature to digital products. Furthermore lacking a lot of value are stocks connected to cryptocurrencies.
Declining to their lowest value since February, Coinbase (COIN) shares suffered the worst week of 2024 according CNN Money. On September 6, COIN ended at $147 representing a decline of roughly 14% thus far this year.
The sell-off also affected other well-known brands in the crypto stock market, particularly those of mining businesses of Bitcoin. Major Bitcoin mining business CleanSpark observed the largest stock value decline 24%. Then other big mining businesses noticed their stock values dropped by at least 10%.
Recent market activity indicates that the crypto market is still somewhat erratic and subject to changes in the policy of central banks and in the state of the economy. Investors are probably going to remain wary as the market waits for the Federal Reserve’s next action and the next inflation estimate. Depending on what transpires, additional money can disappear from the market.
