Crypto Commodities See High Outflows in January

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Cryptocurrency investment products were hit by record outflows in January, according to a report released on Saturday, February 5.

Investors withdrew an average of $61 million from digital asset vehicles every week in January, according to data from CryptoCompare.

It comes as token prices have fallen and there has been a flight from risky assets – a blow that has changed the fortunes of a sector that was white-hot last year.

New companies like Grayscale Bitcoin Trust, which gives investors exposure to crypto assets without directly owning the tokens, have attracted billions of dollars in 2021.

Money started moving in the opposite direction in January for the first time since the summer of 2021, according to data from CryptoCompare. There was a sharp decline in crypto prices and bitcoin fell from its all-time high from last November.

Over time, the Grayscale Bitcoin Trust, which does not allow withdrawals, saw more sellers than buyers for its stock last month. This had the effect of sending the discount between the share price and the value of the trust’s assets to record lows of around minus 25%.

Along with falling crypto prices comes a decline in equities — particularly related to US tech stocks — as investors dump assets seen as speculative or higher risk.

Bitcoin’s fall comes as other cryptos like Ether suffered declines in late January.

Even crypto-focused public companies have been damaged. Robinhood’s price fell in late January, and Silvergate Bank also fell. MicroStrategy shares fell more than 70% at the time.

PYMNTS reported that investors were concerned about the Fed, which recently announced it was withdrawing stimulus to combat rising inflation.

Read more: Behind Bitcoin’s Collapse, Financial Fears Are Eroding Faith in Crypto

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