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April 28, 2021

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Bitcoin posts record weekly outflow as rally stalls

Bitcoin posted a record weekly outflow, with overall sentiment on cryptocurrencies turning cautious as the digital asset’s searing rally hit a wall, data from digital currency manager CoinShares showed on Monday.

Outflows for bitcoin hit US$21 million for the week of April 23, the largest weekly outflow on record.

Total weekly inflows for the sector were just US$1.3 million, the lowest weekly figure since October 2020.

That said, CoinShares said outflows last week were 0.05 percent of the crypto sector’s assets under management, while weekly inflows this year averaged 0.6 percent. Total assets under management were US$54.3 billion as of last week, down from US$64.2 billion in mid April.

“We saw investors shifting funds away from bitcoin amid some idiosyncratic developments last week, prominently including the temporary power outage in mining mecca Xinjiang,” said Matt Weller, Global Head of Market Research at Forex.com and City Index.

Amid serious coal mine accidents in China’s Xinjiang, Shanxi and Guizhou provinces, the Chinese government directed local coal-based power stations to conduct inspections of security measures. Data centers in Xinjiang, including bitcoin mining farms, had to shut down due to subsequent power cuts, according to media reports.

After hitting a record high just under US$65,000 in mid April, bitcoin has plunged nearly 25 percent. On Monday though, the world’s largest cryptocurrency in terms of market capitalization rallied as much as 10 percent and last traded at US$54,031, highlighting the asset’s extreme volatility.

The second largest cryptocurrency ethereum, meanwhile, showed strong inflows of US$34 million. So far this year, inflows were US$792 million, or 8 percent of total AUM, reflecting renewed positive sentiment among investors.




 

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