- Digital asset investment products like Bitcoin ETFs saw outflows for the second consecutive week, totaling $206 million, driven by investor fears about the consequences of the Bitcoin halving.
- Bitcoin experienced the most significant outflows at $192 million, followed by Ethereum at $34 million, as Bitcoin’s price fell 9% last week.
- Despite investor concerns, the Bitcoin halving appeared to positively impact miners in the short term, with miner daily revenue spiking from $71 million to $107 million on the day of the event.
The Bitcoin halving led to outflows from cryptocurrency funds for the second week in a row according to a new report, as investors grew concerned about potential consequences for miners. However, some data suggests the halving may have had a short-term positive impact.
Outflows from Crypto Funds
A report from CoinShares found that digital asset investment products like spot Bitcoin ETFs and exchange-traded products saw total outflows of $206 million last week. This comes after $106 million in outflows the prior week, in the lead up to the Bitcoin halving on April 20.
The majority of the outflows came from Bitcoin funds, totaling $192 million, while Ethereum saw $34 million in outflows. During this time, the price of Bitcoin fell 9% according to CoinGecko.
ETFs and funds containing blockchain equities also saw continued outflows, marking 11 straight weeks for a total of $9 million withdrawn. This aligns with data showing record outflows from Bitcoin ETFs last week.
The report suggests ETP/ETF appetite is declining due to indications that the Federal Reserve is unlikely to drop interest rates this year.
Short-Term Positivity for Miners
Despite investor concerns, data shows the halving had a positive short-term impact for miners. According to Blockchain.com, miner daily revenue spiked from $71 million before the halving to $107 million on the day of the event.
This was partly driven by projects raising funds to mint tokens on Bitcoin’s new Runes protocol, becoming some of the first runes etched to the Bitcoin blockchain. The hype led to increased network fees, benefiting miners.
Conclusion
While crypto funds saw outflows, miners benefited from the excitement around the Bitcoin halving and new protocols launching at the same time. However, anxiety around the halving’s impact on miners led to overall negative sentiment from crypto fund investors.
