Crypto products shed $528M amid recession fears — CoinShares

Cryptocurrency assets started seeing significant outflows last week amid growing fears of a recession in the United States and geopolitical concerns, according to a new report by the crypto investment firm CoinShares.

The week of July 28 to Aug. 3 saw digital asset investment products posting outflows for the first time in four weeks totalling $528 million, CoinShares reported in its latest digital asset fund flows report published on Aug. 5.

CoinShares noted that the latest crypto sell-off is believed to be a reaction to fears of a recession in the US, geopolitical uncertainty and consequent broader market liquidations across the majority of assets.

Bitcoin saw outflows totaling $400 million

As the biggest cryptocurrency asset by market value, Bitcoin (BTC) led last week’s crypto outflows, which totaled $400 million, CoinShares’ data suggests. The sell-off marked Bitcoin’s first outflows after five weeks of inflows.

Ether (ETH), the second-largest cryptocurrency by market cap, posted $146.3 million in outflows last week, with Solana (SOL) seeing an additional $2.8 million in outflows.

On the other hand, multi-asset crypto investment products saw inflows of $18.1 million, with short-Bitcoin also seeing inflows of $1.8 million last week.

“Blockchain equities continued to see outflows, with last week seeing a further $18 million, in line with outflows from broad tech-related exchange-traded funds,” CoinShares stated.

Analysts expect more losses with Bitcoin dropping to $42,000

As CoinShares’ analysis covered the weekly period from July 28 to Aug. 3, it didn’t include the latest sharp decline across multiple markets on Aug. 4 and Aug. 5.

After losing the $69,000 support on July 29, Bitcoin continued to drop below $50,000 on Aug. 5, reaching its lowest price mark since February 2024.

According to data from CoinGecko, BTC is down 15.6% over the past 24 hours and is trading at $51,301 at the time of writing.

Following the market drop, 290,000 traders were liquidated in the past 24 hours, with total liquidations netting $1.1 billion, CoinGlass data indicated.

While industry advocates like Joseph Young suggested that the “bottom is nearing,” some analysts were less optimistic about the potential BTC price moves.

“Although Bitcoin has been in a gradual downtrend, marked by three tops and two bottoms, we anticipate the support line at $55,000 will break, potentially driving prices down to $42,000,” 10x Research CEO Markus Thielen wrote in the latest market update on Aug. 5.

According to the analyst, Ether (ETH) could further drop below $2,000. He added:

“While this may seem extreme to some, economic weakness, as indicated by our ISM report, ongoing weak market structure, on-chain data, and our cycle analysis suggest further stress ahead.”