Crypto Just Lost $5B — And NO ONE Saw This XRP Twist Coming

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• Crypto investment products saw $5 billion in outflows over the last month.
  
• XRP’s ETPs recorded $89M in inflows, defying the broader market downturn.
  
• “Smart money” traders are betting on XRP’s short-term growth despite a bearish market.

Cryptocurrency investment products have witnessed a significant decline in recent weeks, with outflows reaching nearly $5 billion over the past four weeks. A recent report by CoinShares highlights that Crypto exchange-traded products (ETPs) experienced $1.94 billion in outflows last week, marking a slight drop from the previous week’s $2 billion exodus. This brings the four-week total to $4.9 billion, making it the third-largest outflow run in history.

This downturn is only rivaled by two previous sell-offs: one during a March tariff-driven market crash and another in February 2018. However, the CoinShares report also pointed to a glimmer of hope, citing $258 million in inflows during the last days of the week. While this could be an early sign of investor optimism returning, it’s still too early to confirm whether a full recovery is underway.

XRP ETPs Defy the Downward Trend

Among the sea of red, XRP ETPs have stood out as an anomaly. Despite the broader market slump, XRP saw a notable $89.3 million in inflows last week. Interestingly, this occurred even as XRP’s price fell by 6.9%. XRP’s resilience amidst the downturn has caught the attention of many, especially as the broader cryptocurrency landscape remains under pressure.

This influx of capital into XRP contrasts sharply with the performance of other major cryptocurrencies like Bitcoin and Ethereum, which saw substantial outflows. Bitcoin alone experienced a $1.27 billion outflow, with Ethereum following closely behind at $589 million. This suggests that while broader market sentiment is weak, some coins like XRP might still attract investor confidence.

Smart Money Bets on XRP’s Short-Term Growth

Despite the downturn, some “smart money” traders are taking a different approach, betting on the short-term appreciation of XRP. According to data from Nansen, these traders have accumulated $10.4 million in leveraged long positions on XRP in the past 24 hours. This suggests that a significant portion of the market sees potential in XRP, even as the overall market remains bearish.

Also Read: XRP Bullish Reversal: Morning Star Pattern at Key Support Signals Trend Shift

In contrast, these same traders have placed $325 million in net short positions against Bitcoin, indicating a continued lack of faith in the leading cryptocurrency for the time being. While market sentiment remains largely cautious, the moves by these experienced investors may point to shifting strategies within the crypto space.

Signs of Caution Amid Uncertainty

The cryptocurrency market is undoubtedly experiencing a turbulent period, with outflows nearing $5 billion. While the recent inflows into XRP offer a glimmer of optimism, the broader market remains wary. Investors and traders will need to monitor these shifts closely as they try to navigate the complex and volatile crypto landscape. Whether the recent inflows represent the start of a trend or just a temporary blip remains to be seen, but one thing is clear: the crypto market is still in a state of flux.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.