Inflows into cryptocurrency investment products from February 17 to 23 amounted to $598 mln after a record $2.45 bln earlier. Why was there such a sharp slowdown in growth? What caused it? And what does it affect?
The slowdown in investment growth in cryptocurrency investment products could be due to several factors. One of these is the ongoing withdrawal of funds from the Grayscale Bitcoin Trust (GBTC), resulting in significant net outflows of over $400 mln during the reporting period, as reflected in the overall market dynamics.
Total assets under management (AUM) in cryptocurrency investment products reached the highest level since December 2021, but this figure is still below the record $87 bln recorded in November 2021. This could point to a certain stabilization or pause in investment growth after previous record highs.
The presidential elections are approaching in the United States. Former US president Donald Trump believes that cryptocurrency should be dollar-denominated, and he views the fact that digital assets are not controlled in any way as very dangerous.
Investors may also be factoring in risks related to cryptocurrency market volatility, regulatory changes and geopolitical uncertainty, which could give rise to caution in investment decisions.
Despite the slowdown in growth seen in altcoins other than Solana, positive performance in Ethereum ETFs, Chainlink-based products, XRP and Cardano may highlight investor interest in a variety of cryptocurrencies during this period, despite t
he overall market slowdown.