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% of the crypto sector’s assets under management, while weekly inflows this year averaged 0.6%.
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 centres 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%. On Monday though, the world’s largest cryptocurrency in terms of market capitalisation rallied as much as 10% and last traded at $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% of total AUM, reflecting renewed positive sentiment among investors.
“Cryptoasset investors continued to accumulate ethereum as the highly-anticipated July launch of EIP-1559, which will cut the new supply of ETH dramatically, approaches,” said Forex.com’s Weller, referring to the blockchain’s planned upgrade.
Grayscale remains the largest digital currency manager, with US$41 billion in assets as of April 23, down from US$49.5 billion the previous week. CoinShares, the second biggest and the largest European digital asset manager, oversees about US$5.2 billion, slightly down from US$5.7 billion in assets as of mid-April.