Crypto sees largest weekly withdrawals from funds since January
Institutional investors withdrew $134 million from the crypto market in the last week, as Bitcoin's price fell below $40,000 for the first time in weeks.
The week through April 8 saw the largest net outflows from institutional crypto investors since January 2022, as negative regulatory environments in Europe and India, lower trading volumes and a high Bitcoin valuation convinced global crypto funds to withdraw their investments.
According to a CoinShares report, these funds withdrew a net $134 million from the market in one week, with a mammoth $131.8 million being withdrawn from just Bitcoin. The oldest cryptocurrency in the world had reached a high of $48,000 per coin last week after struggling to increase in valuation this year, but has now dropped below $40,000 again this week with strong outflows.
Meanwhile, Ethereum also saw net outflows of $15.3 million during the same time period, while smaller altcoins such as Solana, Cardano and Litecoin saw net inflows to balance the week's investments.
With the new MiCA framework passed in the EU that aims to trace every crypto trade, as well as the new Indian regulations of 30% capital gains tax and a 1% TDS tax on every transaction, crypto trading volumes have taken a nosedive in April.
In India alone, the new rules are predicted to change the profile of the average crypto trader. While a large number of traders to date have been smaller retail traders, with over 54 percent of last years crypto traders investing in the ecosystem for the first time, the near future of Indian crypto trading may be dominated by high net worth individuals (HNIs).
In the last week, , the publicly listed American crypto exchange, had announced their arrival into India and had mentioned allowing users to purchase coins via UPI. Within hours, the NPCI had sent out a press release declaring that they were unaware of crypto exchanges using UPI, and within days Coinbase had to retract their UPI facility.
Last week's net outflows by crypto funds reverses a a recent trend wherein these institutions had invested over $400 million in the two previous weeks.
Edited by Anju Narayanan