Bearish Outflows for Bitcoin Funds Totaled $453M; Regulators Welcome the Downturn

Outflows for Bitcoin-specific funds totaled $453 million last week, the largest by $225 million since records began, according to a CoinShares report. However, despite the current downward trend in crypto, regulators suggest its good and necessary for the market’s growth. 

Apart from Bitcoin, other assets including Ethereum, Short Bitcoin, Cardano, Tron, Pokadot and others reported total inflows of $30 million, resulting in net outflows of $423 million, to partially offset the Bitcoin outflows. However, that $30 million doesn’t put much of a dent in the $453 in outflows from Bitcoin. 

Despite that news and the current downtrend in crypto that has seen crypto prices crash and firms experiencing insolvency problems, regulators at the Point Zero Forum in Zurich last week suggested it’s not a bad thing. 

“This is not necessarily bad,” managing director of the Monetary Authority of Singapore, Ravi Menon said. “As a regulator, a central bank, it’s a great opportunity to separate the wheat from the chaff.”

This statement by Menon is analogous to an opinion from Binance’s CEO, Changpeng “CZ” Zhao, who said last week that not all companies should receive bailouts. Like Menon suggested, it's important for the market to correct itself by eliminating companies that were not fit in the first place. 

He then followed that blog post up with a panel in Zurich where he noted crypto companies need to have a clear business model if they want to succeed. 

“If you're only getting users because you're using incentives to attract users, that's not a real business model,” Zhao said. “Eventually you're going to run out of money and you will crash.” 

That has certainly been the case for high yield platform, Celsius, who is preparing to file for bankruptcy after they froze accounts on the platform a couple weeks ago. 

This sentiment by Menon and Zhao was echoed by countless other executives and regulators at the forum, including crypto.com’s CEO Kris Marszalek, who said he welcomes the recent downturn. 

“This is the time to demonstrate how the real [companies in crypto] can continue building [and] be the steady hand, the calming voice, during volatile times and just deliver real value,” Marszalek said. 

Author: Tyler Irvin

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