By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – Cryptocurrency products and funds received $184 million in net inflows as of last week, data from digital asset manager CoinShares showed on Monday.
Friday’s price weakness, however, did lead to $40 million outflows that day, CoinShares said. For the year, total inflows amounted $9.1 billion, slightly below the record peak of $9.5 two weeks ago.
Bitcoin, meanwhile, attracted $145 million net, its 12th straight week of inflows. It did see outflows of $42 million on Friday, as it bore the brunt of investor jitters amid sharp price declines.
Traders said the weekend fall in prices was connected to a broad move away from riskier assets in traditional markets on worries about the Omicron coronavirus variant.
As prices fell, investors who had bought bitcoin on margin saw exchanges close their positions, causing a cascade of selling. A range of retail-focused exchanges closed more than $2 billion of long bitcoin positions on Saturday, according to Coinglass.
“The crypto markets have become very volatile. The Omicron variant and pressure on the TradFi (traditional finance) markets also seem to affect bitcoin,” said Ruud Feltkamp, chief executive officer at automated trading bot Cryptohopper.
“In contrast, in the bull market of 2017, you also saw several crashes of sometimes up to 38% of its value … Often, the more afraid you are to step in, the better. And when you’re feeling too confident, it’s often a good moment to step out.”
Bitcoin was last down 0.8% at $49,093. Since a record peak of $69,000 hit on Nov. 19, bitcoin has plunged 32%.
CoinShares also noted that bitcoin volume rose to $15 billion last Friday, higher than the typical $8 billion per day average for November and December.
Ethereum saw inflows as well totalling $25 million, but, like bitcoin, saw minor outflows of $4.7 million last Friday.
Polkadot, the coin that facilitates different blockchains to inter-operate, saw outflows of $3 million last week, with the majority of those outflows coming in the latter half of the week.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Alison Williams)
Copyright 2021 Thomson Reuters.