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  • Writer's pictureDavid Manion

August Crypto Capital Outflows Report


August Crypto Capital Outflows Report
August Crypto Capital Outflows Report

The cryptocurrency industry is well-known for its highly volatile price movements, which are primarily influenced by events and liquidity shortages. It is not surprising that there has been a consistent outflow of cash from the cryptocurrency market since the beginning of the year. Bitfinex's most recent report confirms this trend, as the crypto market has seen a significant exit of approximately $55 billion in capital from major cryptocurrencies in August. August Crypto Capital Outflows Report


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August Crypto Capital Outflows Report $55 Billion Drained In The Past Month

According to Bitfinex's analysis, the combined realized value of Bitcoin (BTC), Ethereum (ETH), and major stablecoins such as Tether's USDT, USD Coin (USDC), BUSD, Dai, and TrueUSD (TUSD) saw a capital outflow of approximately $55 billion in August.


After a difficult first half of the year, the market experienced a shift in July as Bitcoin led to inflows, reaching over $100 billion. However, in early August, profit-taking and mixed signals from the US economy caused outflows to occur.


The report indicates that there was a prevailing trend of capital outflows in the industry by early August. Institutional investors' interest also decreased during this period, with digital asset investment funds experiencing outflows after four weeks of heavy inflows. As of now, the outflows have reached a total of $294 million.

What Caused The Crypto Capital Drain?

According to a report from Bitfinex, August saw the biggest capital drain in the crypto market this year, with Bitcoin being hit the hardest. The majority of the drain was caused by two isolated events, leading to significant price fluctuations in a short period of time. In particular, on August 17th, Bitcoin's price dropped by 11.4% in just a few hours, making it the largest red monthly candle for BTC since the bear market bottom was formed in November 2022.


The crypto derivative market has also experienced a similar trend, with Ether (ETH) futures and options markets slowing down significantly in 2023. The average daily trading volume has decreased by almost 50% from the two-year average, coming in at $14.3 billion daily.


Data shows that almost 69% of all mined Bitcoin have not moved in over a year, indicating high conviction from investors and a positive outlook on the future of the digital currency. While September has been relatively quiet in terms of price movement, many in the industry are anticipating the start of the next bull market. However, some believe that the bull run actually began in March, but the market has yet to catch on.


Total market cap falls to $1.03 as outflows continue | Source: Crypto Total Market Cap on Tradingview.com
Total market cap falls to $1.03 as outflows continue | Source: Crypto Total Market Cap on Tradingview.com


Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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