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Crypto markets down as outflows increase to $142m last week

By Robert Davis

18:26, 20 December 2021

Cryptocurrency exchange rate panel
Outflows from crypto are driving prices down - Credit: Shutterstock

The cryptocurrency market opened down on Monday as outflows from popular exchanges increased to $142m (£107.48m) last week.

Meanwhile, investors are continuing to digest the news that the US Federal Reserve Bank will accelerate its asset purchase taper and the continued spread of the Covid-19 Omicron variant across the globe.

At 17:00 UTC, Bitcoin was down more than 2% to $46,000 per unit while other popular assets like Ethereum and Cardano suffered larger losses of 2.4% and 3.4%, respectively.

Outflow totals

According to a note from James Butterfill, an analyst at CoinShares, last week was the first to record net-negative cryptocurrency outflows in more than 17 weeks.

While Butterfill says there are several reasons for the outflows, he adds that the move is not isolated to the crypto markets as several risky assets have also seen similar declines.

Last week, Bitcoin saw outflows of more than $86m while Ethereum’s outflows totaled $64m.

“The outflows represent only 0.23% of total assets under management (AuM), and from an historical perspective are small relative to the outflows in early 2018 where weekly outflows represented up to 1.6% of AuM,” Butterfill wrote.


3,451.80 Price
+1.170% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


0.58 Price
-8.200% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


64,881.50 Price
+0.590% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00


378.50 Price
+0.360% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

Investor sentiment

The outflows are also a sign of souring investor sentiment, according to a note published on Monday by Kevin Kelley, an analyst at Delphi Digital.

“As many of us gear up for the holiday season, the market is not looking quite as cheerful,” Kelley wrote. “Sentiment is dire, momentum is weak, and all this talk about inflation and policy uncertainty has us longing for optimism wherever we can find it.”

Pessimism misguided

Despite the uneasiness many investors are feeling, Kelley adds that the recent pessimism over cryptocurrencies is “sorely misguided.”

For example, Kelley points to the increase in stablecoin transfer volume so far in December as a sign that the market may be reaching bottom.

He also points to the proof-of-stake network migration that Ethereum has planned in 2022 as a reason for investors to be excited about the future of crypto. The change may make it cheaper to transact on the Ethereum blockchain, which could usher in a new era of Ethereum dominance, Kelley said.

Read more: 5 most common cryptocurrency scams and how to avoid them

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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