Altcoins Defy Market Trends Amid Persistent Outflows in U.S.

Digital asset investment products are experiencing a challenging period, marked by a second consecutive week of outflows totaling $1.17 billion, according to CoinShares. This trend is largely attributed to ongoing volatility in the crypto markets and uncertainty surrounding potential U.S. interest rate cuts.

Bitcoin and Ethereum Face Significant Outflows

Bitcoin and Ethereum have been significantly impacted, with outflows of $932 million and $438 million, respectively. The negative sentiment is primarily fueled by market gyrations following the liquidity cascade on October 10 and speculation over a possible December interest rate cut in the U.S.

Trading volumes for Exchange Traded Products (ETPs) remained high, reaching $43 billion for the week. Although there was a brief recovery in intraday flows on Thursday, optimism waned by Friday as hopes for a resolution to the U.S. government shutdown faded, leading to renewed outflows.

Regional Disparities in Fund Flows

There is a noticeable divergence between the U.S. and European markets. While the U.S. experienced outflows of $1.22 billion, Germany and Switzerland saw inflows of $41.3 million and $49.7 million, respectively. This highlights a regional disparity in investor sentiment.

Altcoins Show Resilience

Despite the overall negative trend, altcoins have demonstrated resilience. Solana, in particular, reported inflows of $118 million last week and a staggering $2.1 billion over the last nine weeks. Other altcoins like HBAR and Hyperliquid also saw notable inflows of $26.8 million and $4.2 million, respectively.

The contrasting performance of altcoins amidst widespread outflows underscores their growing appeal among investors seeking diversification beyond traditional cryptocurrencies like Bitcoin and Ethereum.

For additional details, the full report can be accessed on the CoinShares research blog.

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