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ETH Outflows At Record Clip, Pundits Parse Mixed Signals in Crypto Market Featured

Underlying fiscal data shows sentiment for digital assets has waned in recent weeks, although what to do with that information varies greatly depending on who you ask.

cryptocurrency 3409725 640smallAccording to data from CoinShares’ Digital Asset Fund Flows Weekly, investors have soured on digital assets and their related products as they have now undergone two consecutive weeks of outflow—and that outflow translated to $21 million worth of movement.

“Ethereum had the largest outflows on record last week, totalling US$12.7 m. Ethereum has been the stalwart relative to Bitcoin over recent months but inflows over the course of last week were mixed, implying mixed opinions amongst investors,” according to the analysis.

In light of recent trends, JPMorgan Chase, for example, has taken a bearish stance on the cryptocurrency market. According to Bitcoin.com, the investment bank said a diminished demand for Bitcoin by institutional investors is an albatross for the cryptocurrency market.

“We believe that the return to backwardation in recent weeks has been a negative signal pointing to a bear market,” according to the report cited by Bitcoin.com. “This is an unusual development and a reflection of how weak bitcoin demand is at the moment from institutional investors that tend to use regulated CME futures contracts to gain exposure to bitcoin.”

From Twitter:

Márcio M. Silva @marciojmsilva

"Ethereum saw record outflows last week, as investors pulled $13 million from the second largest cryptocurrency http://dlvr.it/S1mYw5"

On the other hand, Pantera Capital sees an inherent buying opportunity for those with the patience to wait out the near-term chilly crypto market. Their analysis calls for investors to “go against the urge” to sell off crypto assets as “human nature is pro-cyclical.”

“It’s human nature that we want to buy when the market is surging up—when the FOMO devil is whispering in our ear,” according to the asset management company. “When the markets are crashing–and our spouse/friends/boss are all WTF, we want to flee…we want the pain to stop. We all do it.”

According to information from Pantera Bitcoin Fund, which the fund boasts is the oldest of its kind, we are in the middle of a third crypto data cycle, with the first two taking place in 2013-2014 and 2017-2018.

“… as we’ve stressed, bitcoin generally goes way up. It has averaged more than tripling annually for ten years. Anyone that has held bitcoin for 3.25 years has made money. Bitcoin has only printed one calendar year with a lower low. So, most of those investors are up big-time,” they wrote. “Resist the urge to close down positions. If you have the emotional and financial resources, go the other way. For new investors, it’s best to buy when the market is below trend. Now is one of those times.”

Additionally, the crypto market was also shaken up when Tesla top dog and tech mogul Elon Musk, again, took to social media to clarify his stance on Bitcoin. To that end, Musk reopened the door to the idea that Tesla would accept Bitcoin as payment if it could be mined more environmentally friendly.

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