Bitcoin has seen two straight weeks of outflows, while investors have poured money into ether for a third week ahead of a key network upgrade: CoinShares

Ethereum and bitcoin
Ethereum and bitcoin

Investors pulled their money from bitcoin products for a second straight week in the seven days to July 16, with many likely booking profits on long-held positions, while pouring money into ether for a third week, according to data from CoinShares.

Bitcoin assets saw flows drop 10.4% over the week, while ether saw flows rise 11.7%, according to the company’s most recent weekly flows report released on Tuesday.

Bitcoin lost around 7% in value in the week to July 16, when it fell below $32,000. Since then, it has fallen another 6.5% to around $29,720, driven by rising investor risk aversion over the surge in cases of COVID-19 that has battered global markets this week.

Since the currency peaked in April at almost $64,000, it has lost more 50%, although it is still up by over 200% over the last year. CoinShares investment strategist James Butterfill told Insider he believed a portion of the bitcoin outflows were down to longer-standing investors taking profit now in case of a steeper slide over the coming months.

CoinShares graph
CoinShares

“Most of our funds were launched in 2015 and we saw profit-taking earlier this year and not now. So the outflows we are seeing in some funds is simply due to when individuals first invested, rather than negative sentiment towards bitcoin,” he said.

In 2015, bitcoin traded between lows of around $110 and a high of close to $500. It’s risen by almost 30,000% since then.

“People that are seeking out, might not necessarily be doing so for bearish reasons, but instead their deciding to profit now, perhaps their line of thinking is that ‘I should have sold at $55,000, but it’s fallen down to $30,000, so I’ll just take profits here because my worry is that the BTC price is not going to do much over the summer,” Butterfill said.

Meanwhile, over the last 7 days ethereum’s ether token has fallen by around 13% to $1,748.85, Coinmarket cap data shows. After peaking in May above $4,300, much like bitcoin, it’s also lost around 50% in value. Over the last 12 months, however, it’s up by more than 600%.

Investors are hoping to profit from the upcoming upgrade to the ethereum network. Ethereum 2.0 is scheduled to roll out on August 4 and some investors may be buying, given that the shift will result in supply reduction and the price potentially rising sharply.

Bitcoin products were the only ones that saw outflows in the latest week. The smaller altcoins, together with ether, all registered modest inflows. According to the CoinShares data, which is an accumulation of global flows, XRP and dot saw a 0.3% rise in inflows, while ada saw an increase of 0.4%.

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Cryptocurrencies are taking the developing world by storm, with more users now in Nigeria than in the US – 2 experts lay out how bitcoin is changing emerging-market finance

Globe
Globe

  • Insider spoke to James Butterfill from CoinShares and Marius Reitz from Luno in Africa about bitcoin in the developing world.
  • El Salvador recently made bitcoin legal tender and other governments may follow suit.
  • Cryptocurrencies can bring finance to the “unbanked” and help counter volatile domestic currencies, the two experts said.
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Cryptocurrencies have made it into the mainstream this year, with crypto-backed bank cards, investment products and traders, both big and small, have got in on the action, driving the likes of bitcoin, ether and dogecoin to record highs.

In the developing world, crypto adoption is growing at breakneck speed. Young, fast-growing populations that lack access to traditional finance, but have smartphones, from Brazil to Botswana, are driving the surge in the use of cryptocurrencies.

James Butterfill, who is an investment strategist at CoinShares, the largest crypto exchange traded product provider in Europe, and Marius Reitz, the general manager in Africa of crypto exchange Luno discussed the social benefits of bitcoin for the developing world.

“In third-world countries, we are seeing the take-up of bitcoin. If you look at bitcoin volume growth, it’s massive,” Butterfill told Insider.

For example, according to a Statista survey of global consumers in February, nearly one in three of those polled in Nigeria said they owned, or used, cryptocurrencies, versus just 6 out of every 100 in the United States, in 2020.

El Salvador’s recent decision to make bitcoin legal tender is an example of how developing countries are using crypto. The World Bank recently said it would not work with the country on its cryptocurrency plans because of how volatile it believes these assets are.

The amount of bitcoin that changes hands in emerging economies is exploding. Trading volumes in Brazil have risen 2,247% year-on-year in 2021, while in Venezuela, where political turmoil has created hyperinflation and economic crisis, crypto trading volumes have risen 833% in the last 12 months, according to data provider Kaiko.

In Nigeria, Africa’s largest economy, trading volumes have risen 128% year on year, and in Turkey, where inflation and economic decline have hit the lira, they’re up 143%, based on Kaiko’s data.

Bitcoin has been trading between $40,000 and $31,900 over the last month, but has moved between lows of $30,000 and to highs of as much as $63,500 over the course of 2021. Despite its volatility, consumers in developing countries love it.

There are about 1.7 billion people that are considered “unbanked”. However, around 48% of the global population has a smartphone and that percentage, in theory, have access to the internet, and therefore, cryptocurrencies, Butterfill said.

In Latin America, only 30% of the population over the age of 15 have a bank account, according to 2019 data by consultant Mckinsey.

“I think that really is a positive thing that bitcoin’s helping the unbanked be bankable,” Butterfill said.

A closer look at Africa

Crypto use has also grown in Ghana, Kenya, South Africa, Botswana and Zimbabwe.

“One region that may go unnoticed in the development and usage of cryptocurrencies, is Africa. The continent is one of, if not the most promising, regions for the adoption of cryptocurrencies due to its unique combination of economic and demographic trends,” Luno’s Reitz said.

One of the key factors that is encouraging people in Africa to use cryptocurrency is the cost of transferring money. The World Bank reported in 2020 that sending money to Africa via traditional bank transfer cost an average fee of 8.9% compared to the global average of 6.8%.

Sending money abroad, or even receiving funds from overseas, is littered with additional costs, including exchange rates and this is where crypto is helping fill that gap.

“It’s either really expensive, or really difficult to do. So, with something like bitcoin, you can have an international bank account and it costs you virtually nothing, that’s what’s really powerful about it,” CoinShares’ Butterfill said.

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Crypto trading volumes have fallen to a 9-month low as Europeans ditch bitcoin, although US investors are still buying: CoinShares

British flag and US flag
British flag and US flag

  • Bitcoin has seen outflows in Europe but inflows from North America in the latest week, according to CoinShares.
  • Trading volumes totalled $1.58 billion for the week to July 9, the lowest since October.
  • Multi-asset investment products, like the Bitwise 10 crypto index fund, were the most popular last week.
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Cryptocurrency trading volumes fell to their lowest in nine months in the latest week, as bitcoin continued to fluctuate in a relatively narrow range, according to data from digital asset manager CoinShares on Tuesday.

Outflows picked up speed in Europe, where regulators have toughened their scrutiny of cryptocurrency trading in general, while US investors were net buyers of crypto assets, according to CoinShares data.

The crypto trading volumes totalled $1.58 billion for the week, as activity quietened mostly for bitcoin. Bitcoin saw net outflows of $6.9 million, a steep decline from net inflows of $38.9 million the week before.

Weekly crypto asset flows
Weekly crypto asset flows

“In recent weeks, there has been a regional divide in bitcoin inflows, with North American providers seeing consistent inflows while their European counterparts have continued to see outflows, suggesting a geographic divergence in sentiment,” the report said.

So far this month, bitcoin has traded in a relatively narrow band, between lows of around $32,100 and a high of around $34,500 – a far cry from the extreme volatility of May, when it swung from a low of $30,000 to a high of nearly $59,600, according to Coinbase.

Since hitting a record of nearly $65,000 in April the coin has tumbled by nearly 50%, although it is still up almost 260% in the last year.

Regulation was another factor. The UK regulator banned retail consumers from buying crypto derivatives last year. Since then, it ordered Binance, a crypto exchange, to halt regulated activities in the country.

“Europe is a little bit behind in terms of investment into crypto assets,” James Butterfill, CoinShares chief investment strategist, told Insider.

CoinShares is Europe’s largest crypto asset manager. The company had $3.35 billion under management by the end of the first quarter, according to its recent earnings report.

Other crypto assets witnessed net inflows. Ether saw inflows of $800,000, Binance coin saw inflows of $400,000 and cardano’s ada token saw $600,000 in flows.

Multi-asset investment products, like Bitwise 10 crypto index fund, which tracks the performance of the top 10 crypto coins for example, were the most popular last week, with inflows of $1.2 million. CoinShares said this suggested investors were diversifying their holdings.

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Ethereum saw record outflows last week, as investors pulled $13 million from the second largest cryptocurrency

GettyImages 1228507184
Ethereum products suffered outflows in early June.

  • Investors pulled $12.7 million from ethereum investment products last week, according to data from CoinShares.
  • The outflows mark a record high for ethereum after the cryptocurrency served as a ‘stalwart’ during bitcoin’s recent slide.
  • Bitcoin outflows are showing signs of cooling.
  • See more stories on Insider’s business page.

Ethereum products were hit with outflows of $12.7 million in early June, the biggest decline on record as institutional investors were working out their views on the blockchain’s digital token after serving as a pillar of support during bitcoin’s recent plunge.

The data from CoinShares, a digital currency management firm, came in an update published Monday which also said outflows from digital assets last week reached $21 million, marking a second straight week of negative net investment.

The moves in ethereum marked a shift from the prior week when inflows were $33 million, illustrating that the ether token remained the top choice in so-called altcoins among investors.

“Ethereum has been the stalwart relative to bitcoin over recent months but inflows over the course of last week were mixed, implying mixed opinions amongst investors,” said CoinShares in its update. The price of ether dropped about 12% in the week ended June 11 and fell below $2,400.

Bitcoin, the world’s most traded cryptocurrency, was rocked by a recent selloff that began in May stemming in part from threats from China about cracking down on mining and trading and cryptocurrency taxation efforts by US officials.

But bitcoin outflows of $10 million last week were sharply less than the prior week’s record decline of $141 million. Trading activity in bitcoin investment products rose by 43% compared with the previous week, said CoinShares.

Total weekly outflows in digital products have reached $267 million since mid-May, which represents 0.6% of total assets under management.

“While sentiment has weakened over the last month investors on the whole remain committed given the magnitude of inflows seen this year which represent 13% of AuM, or $5.8 billion,” a figure that nearly matches the $6.7 billion logged in 2020, the company said.

Bitcoin this week has jumped above $40,000 after Elon Musk tweeted that Tesla would accept bitcoin payments again once mining can be done using cleaner energy. Meanwhile, ether’s price advanced and flirted with $2,600.

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Ethereum hits its highest ever crypto-market share as investors load up following dramatic May selloff

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Ethereum represented more than a quarter of crypto assets under management in late May.

  • Ethereum’s market share rose to its highest on record during the last week of May, CoinShares said Tuesday.
  • Ethereum’s market share of nearly 27% was boosted as investors took advantage of a drop in price during May’s crypto market crash.
  • Bitcoin investment logged outflows of $4 million last week but inflows remain positive for 2021.
  • See more stories on Insider’s business page.

Ethereum’s market share leaped to its highest point on record during the last week of May as investors took advantage of a price drop.

Ethereum’s market share rose to nearly 27%, becoming the top investment product among crypto assets last week, according to figures from CoinShares released Tuesday. Investors snapped up $46.8 million in ether, the token representing the world’s most utilized blockchain.

Ethereum prices and those of other cryptocurrencies were throttled lower as part of a massive selloff in the space, fronted by a plunge in bitcoin below $32,000 as the crypto market faced regulatory threats. Officials in China again said they would crack down on mining and trading of bitcoin, citing environmental and social concerns, and the US Treasury outlined plans to have cryptocurrency transfers of at least $10,000 reported to the Internal Revenue Service.

But that “digital price weakness” also propelled investors to push $74 million in the market as trading wrapped up in May, CoinShares said.

Ether’s price hit its lowest point of the month on May 23, sliding by 24% to $1,737.47 from the previous session. The cryptocurrency had already been under pressure the week before as it was knocked down from above $4,000.

“The price correction had a minor impact on investment flows the previous week, but this looks to have recovered, with all product providers seeing inflows,” said CoinShares about ethereum. Ethereum eventually trimmed May’s price decline to roughly 2%.

Outflows remained focused on bitcoin investment products last week, leaving the world’s most traded crypto to log a decline of $4 million. However, inflows into bitcoin investment products were still positive for 2021, at $4.4 billion.

Inflows across crypto assets reached $298.4 million in May, putting total assets under management at $45.1 billion, the analytics firm said.

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A Canadian bitcoin ETF has attracted $823 million in just 3 weeks since launching as crypto demand remains strong

bitcoin

A Canadian bitcoin exchange-traded fund that has only been trading publicly for three weeks has amassed $832 million ($1 billion Canadian dollars) in assets under management.

The 3iQ CoinShares bitcoin ETF launched on April 19 and is the fastest bitcoin ETF in Canada to reach 1 billion Canadian dollars in AUM, according to a press release. The fund trades on the Toronto Stock Exchange under the ticket “BTCQ.”

The rapidly growing ETF demonstrates that investor demand for bitcoin isn’t slowing down, despite other cryptocurrencies like ether and Dogecoin gaining recent attention. Despite pulling back from it’s all-time-high above $64,000, Bitcoin is still up 97% year-to-date, hovering at $58,000 as of Friday afternoon.

“Reaching $1 billion[CAD] in only three weeks speaks to the enormous market demand for bitcoin,” said Fred Pye, Chairman & CEO of 3iQ. “The pace of its growth is yet another milestone in 3iQ’s goal to provide investors with more ways to gain exposure to the largest digital asset in the world.”

The 3iQ CoinShares fund isn’t the only bitcoin ETF that’s seen a stellar first few weeks of trading. The Purpose Bitcoin ETF hit $1 billion in assets under management one month after it started trading earlier this year.

The success of Canadian funds and the swelling market capitalization of bitcoin above $1 trillion has investors wondering if the US SEC will finally approve a fund in the states. The US regulator is currently reviewing applications for at least nine bitcoin ETFs, though a decision to green light a launch may have to wait until at least mid-June.

The 3iQ CoinShares Bitcoin ETF gained 3.7% Friday.

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The best time to buy bitcoin was ‘yesterday’ and allocating 4% of a portfolio is a good bet, a chief strategist at CoinShares says

Bitcoin 1
  • The best time to buy bitcoin was “yesterday” and the second best is “today,” a chief strategist told CNBC.
  • Investors should consider a 4% allocation of bitcoin to their portfolios, Meltem Demirors said.
  • “A 4% allocation to bitcoin balances the reward, as well as the risk of drawdowns.”
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The ideal time to invest in bitcoin has already slipped by, according to Meltem Demirors, chief strategy officer at digital asset investment firm CoinShares.

“The best time to invest in bitcoin was yesterday – the second best time to allocate is today,” she told CNBC’s “Squawk Box Asia” on Monday.

Demirors believes regulatory concerns around cryptocurrencies, which have been around for a long time, are unlikely to thwart investor plans to allocate bitcoin to their portfolios. “At this point, our belief is: Bitcoin is not a question of if, but when,” Demirors said.

The size of the Bitcoin market recently shot past $1 trillion as it hit a record high of $58,354. The digital token was trading lower around $52,976 on Monday, but it has still gained 92% year-to-date. A flurry of adoption by major Wall Street players and large companies such as Tesla, Bank of New York Mellon, and Mastercard has added to its epic rally this year. 

That said, Demirors said investors should not allocate significant portions of bitcoin to their balance sheets.

“Our research has found that in a traditional 60-40 portfolio, a 4% allocation to bitcoin balances the reward as well as the risk of drawdowns,” she said. The 60-40 portfolio mix is considered the simplest strategy for those investors who want diversified streams of income. It involves placing 60% in equities and 40% in fixed income.

Will Hobbs, an investment chief at Barclays, is more skeptical about bitcoin. He told Insider the digital asset sounds “increasingly cultist” and a rise in interest rates could dent the world’s most popular cryptocurrency. Hobbs said Barclays considers two factors in asset allocation – positive expected return and diversification appeal. 

“Now it may well be over time that bitcoin satisfies both of those. But at the moment it’s very hard to say,” he said.

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