Crypto Winter: A Record Week of Investor Withdrawal

The crypto winter continues to freeze the industry and if we knew that investors loved cryptocurrencies, their desertion has only just begun.

An increasing distance

The crisis is frightening and although no improvement is foreseen for the time being, the most passionate people are turning their backs. If we knew that investors were becoming increasingly pessimistic, the record weekend of losses that happened in mid-June only scared them more.

For the cryptosphere, however, the party doesn’t seem over. In fact, more and more investors are withdrawing from the market. According to CoinShares, the past week was a record exit time. A whopping $423 million would have been included, for just $15 million in entries.

These releases are the biggest ever, and the previous record also happened last January with $198 million taken off the market. This amount is not the highest compared to total assets under management, which peaked during the bear market of February 2018, when 1.6% of assets under management were withdrawn. Last week’s outflow was the third largest ever, accounting for 1.2% of assets under management.

Excerpt from CoinShares Weekly Investor Retreat Report

The record is solely focused on the Bitcoin market, which remains the most watched asset. This generally defines the rise or fall of cryptocurrencies, the slightest shake is enough to scare away the main enthusiasts. However, if this phenomenon was registered in the past week, the first disconnections were visible from June 17. It would therefore be these first leaks that would have caused the sudden fall of the piece between this day and June 19.

In other words, investor fear caused the historic weekend of losses, not the other way around. This partly explains the selloff that weakened the price of Bitcoin at the time.

Source: CoinShare Twitter account

Investor desertion: symptomatic of a profitable industry?

Panic remains the strongest sentiment in the sector. A lot of users prefer to sell their coins for a ridiculous price instead of losing everything. Still, the flight of investors remains symptomatic of a certain frenzy of profit. Indeed, despite the crisis, enthusiasts continue to earn money at all costs.

However, the problem is there: since Bitcoin has plummeted, cryptocurrencies no longer generate enough profit. The only solution then remains to sell everything and look for a juicier company. Some top executives will say that this phenomenon is part of the industry’s purge. However, this corrupt population remains very much present in the crypto sphere and becomes the mainstay of the price of certain cryptocurrencies. If we really want to get rid of the speculative reputation of digital currencies, the involved investors would have to leave… and possibly some coins would have to disappear. The crypto crisis and the aversion of users interested in money are therefore likely to cause more cold sweats in the future.


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