According to the latest figures released by the investment firms dealing in digital assets including Bitwise and 21Shares, the outflow related to the category investment continues to remain unabated for the fifth week in a row. It is important to know that this is the longest streak of outflows that the market has witnessed since January 2018. The commutative outflow value is pegged to be around $93 million, according to the report of the asset manager privy to the development.
This number stands in stark contrast to an increasing number of ETF filings associated with digital assets. Out of the total applications received by the US Securities and Exchange Commission (SEC), 18 have been filed this year only. In the last two weeks, three more applications have been added to this number after the positive comment of Gary Gensler, the head of the SEC.
Gensler said that the exchange could become open to the idea of Bitcoin ETF in case the fund is based on the future rather than the digital coin itself. However, even after this positive statement, cryptocurrency experts are skeptical about the prospects of Bitcoin ETFs coming into demand again. As there are already a number of instruments through which exposure to Bitcoin and cryptocurrency can be taken in a more tax-friendly manner, this skepticism has some substance to it.
The outflow of the funds would have been much bigger if the largest cryptocurrency fund (GBTC) had allowed investors to redeem their shares. At the same time, not everybody is predicting doom and gloom for the market. The performance of Bitcoin funds will ultimately be shaped by the way the coin performs in the coming times. This means in case of a rebound in Bitcoin prices, the demand for digital assets can see a positive trend once again. That being said, it’s anybody’s guess to predict when and how this kind of scenario arises in the future.