James Butterfill, head of research at CoinShares, said the exodus in the crypto market reflects a sentiment shock, with geopolitics, interest rate expectations and capital turnover into artificial intelligence weighing on digital assets.
In a statement sent to Cointelegraph, Butterfill said that sentiment in the crypto market has “significantly deteriorated” following billions of dollars flowing out of digital asset investment products in recent weeks.
“This is purely an emotional shock rather than a structural destruction,” Butterfill said.
Butterfill added that the adjustment is primarily driven by geopolitics, with uncertainty surrounding the Iran conflict weighing on the interest rate outlook. He said that while markets were starting to price in the possibility of rate hikes, expected rate cuts were taken off the table.
comment follow a sharp reversal U.S. physical Bitcoin exchange-traded funds (ETFs) recorded net outflows of approximately $1.72 billion last week.
Spot Bitcoin ETF weekly flow data. sauce: SoSoValue
Bitcoin rebound may still be fragile
Other analysts said: Bitcoin’s recent rebound It may not be enough to confirm recovery. Paul Howard, senior director at liquidity investment firm Wincent, said in a statement to Cointelegraph that last week’s outflows reflected institutional investors’ reaction to macroeconomic headlines, while pressures across tech markets were indicative of broader strains facing risk assets.
Howard said that Bitcoin’s drop below the major moving averages suggests the market may be entering a more cautious phase, while CME Bitcoin’s increased volatility indicates continued news-driven fluctuations. He said he remains vigilant if the recovery proves sustainable.
Related: Cryptocurrency users are wary of Anthropic releasing Claude Mythos with security measures
Adam Haymes, head of asset management at crypto investment firm Tesseract Group, said much of the market talk was focused on: 32 sales by strategy $BTC in late may. But the sale, which raised about $2.5 million, was too small to mechanically explain the broader problem, he said. $BTC decline.
“Strategy has been treated as an almost unilateral source of corporate demand, which has destabilized confidence, but that was a signal shock, not the driving force behind the decline,” Haymes said.
magazine: Vietnam prepares cryptocurrency pilot, Hong Kong pushes ahead with tokenization: Asia Express
