Money is flowing from Bitcoin directly to other assets
Bitcoin (BTC), the main cryptocurrency in terms of market capitalization, reached a record outflow last week. Coinsshares, a digital currency manager, released a report on May 17, noting that BTC lost $ 98 million (£ 69 million) and these funds were exclusively from BTC investment products. Supposedly, outflows represented 0.2% of assets under management (AUM).
According to Coinsshares report, all other digital investment products recorded positive flows, totaling $ 48 million. As such, the company concluded that investors are diversifying their portfolios by investing in currencies with the next developments, such as Cardano (ADA) and Polkadot (DOT) with inflows of US $ 6 million and US $ 3.3 million, respectively. However, ETH was the most popular currency after obtaining entries worth $ 27 million.
ETH set a new record as well, given that its trading volumes for investment products exceeded BTC. The ETH investment products pointed out by CoinsShares had a trading volume of US $ 4.1 billion, while BTC registered a volume of US $ 3.2 billion. For comparison, investors injected $ 15.6 billion in BTC products in 2020, while ETH has just $ 2.5 billion in the same period.
BTC continues to affect the altcoin market
This news comes after the BTC / USD hit a new all-time high (ATH) at $ 64,863.10 on April 14. While the currency struggled to maintain that upward momentum, it soon made a strong downward correction and started trading above the $ 50,000 level for a few days before diving to trade as low as $ 47,714.66.
However, the currency soon gained momentum and violated the $ 50,000.00 and remained there until a Elon Musk’s tweet stimulate a new downward trend in the BTC market. With that, the bears pulled the BTC below 50k, getting close to 42k. This marks the lowest point the BTC has reached since February 9th.
As is the norm in the cryptocurrency market, BTC performance determines the direction that most alternative currencies will take. At the moment, all currencies on the top-10 list of major crypts, except XRP and USDT, are bleeding with the ICP being the biggest loser after the 16.41% drop in value in the last 24 hours.