Cryptos Decline Amidst Spike In Yields

Prices of top-ranked cryptocurrencies recorded a decline over the past 24 hours amidst a spike in bond yields. Simmering concerns about the escalation in geopolitical tensions in the Middle East and the massive surge in crude oil prices also dampened market sentiment.

Yields on government bonds hardened overnight, increasing the opportunity cost of holding cryptocurrencies that are typically non-interest bearing. Ten-year U.S. treasuries hardened more than 0.5 percent whereas yields in the 5-year and 2-year tenors spiked around 0.4 percent. Longer tenor U.S. treasuries over the 30-year tenor recorded an overnight hardening of 0.2 percent in yields.

Amidst the lingering anxiety, overall crypto market capitalization has decreased 1.7 percent overnight to $2.2 trillion. None of the top 10 non-stablecoin cryptocurrencies are trading in the overnight green zone. Only 7 of the top 10 are holding on to weekly gains whereas 3 are trading with losses on a year-to-date basis.

Bitcoin slipped 1.4 percent overnight to trade at $62,845.11, around 15 percent below the all-time high. BTC has gained 3.2 percent in the past week while holding on to gains of more than 48 percent in 2024. The original cryptocurrency traded between $64,043.99 and $62,685.82 in the past 24 hours.

Data from Farside Investors on Bitcoin Spot ETF products in the U.S. showed a net inflow of $202.6 million on Monday versus $252 million on Friday. iShares Bitcoin Trust (IBIT) topped with inflows of $224.1 million on Monday.

Ethereum slipped 1.8 percent in the past 24 hours to trade at $2,687.31, around 45 percent below the previous peak. Weekly gains are close to 0.90 percent whereas gains in 2024 have decreased to 17.7 percent. Ether traded between $2,748.81 and $2,668.89 in the past 24 hours.

Data from Farside Investors on Ethereum Spot ETF products in the U.S. showed a net outflow of $13.2 million on Monday as compared with outflow of $5.7 million on Friday. No ETF recorded net inflows on Monday whereas Grayscale Ethereum Trust (ETHE) topped with net outflows of $9.5 million.

4th ranked BNB (BNB) shed 1.5 percent overnight to trade at $554.53. 5th ranked Solana (SOL) lost 1.8 percent overnight to trade at $156.85. 7th ranked XRP (XRP) recorded an overnight decline of 1.4 percent as it changes hands at $0.5899. 8th ranked Dogecoin (DOGE), 9th ranked TRON (TRX) and 10th ranked Toncoin (TON), all erased more than 3 percent in the past 24 hours.

59th ranked Helium (HNT) and 83rd ranked Akash Network (AKT), both recorded overnight gains of more than 10 percent. HNT, a blockchain-based network designed for the Internet of Things has added 30 percent over the 30-day horizon amidst reports of 2 large U.S. carriers attempting to offload their traffic onto the Helium MOBILE Network. AKT, an AI-focussed cryptocurrency is in the spotlight, gaining close to 17 percent over the past week, amidst anticipation ahead of the earnings update by AI darling NVIDIA on Wednesday.

96th ranked DOGS (DOGS), a Telegram-native meme coin which commenced trading on August 26 is the greatest laggard, shedding 19 percent. With 8 of the 9 meme cryptos ranked among the top 100 overall recording overnight declines, the meme category has shed 2.3 percent in market capitalization.

Meanwhile, firm rate cut hints by Fed Chair Jerome Powell at the Jackson Hole economic symposium helped boost inflows to digital asset investment products. The CoinShares’ Digital Asset Fund Flows Weekly report showed inflows of $533 million during the week ended August 24 as compared with $30 million in the previous week. Year-to-date flows increased to $22.7 billion.

Bitcoin-based products topped with inflows of $543 million. Multi-asset products received inflows of more than $20 million whereas Ethereum-based products recorded outflows of more than $35 million.

Close to 80 percent of the cumulative AUM of $89.4 billion is attributed to Bitcoin products that account for an AUM of $71.4 billion. Bitcoin’s dominance of crypto market is much lower, at around 56 percent. AUM of Ethereum products stood at $11.2 billion. Multi-asset portfolios command assets under management of $4.3 billion. An AUM of $1.2 billion is attributed to Solana-based products and $580 million to Binance-based products.

The provider-wise analysis of flows inter alia shows inflows of $346 million to iShares ETF followed by $88 million to Fidelity ETF and $84 million to Ark 21 Shares ETF. ProShares ETF also recorded inflows of $38 million. Outflows of $189 million were recorded from Grayscale Investments.

iShares ETF tops with a cumulative AUM of $23.4 billion implying a share of 26.2 percent. Though year-to-date outflows exceed $18.9 billion, Grayscale Investments still accounts for an AUM of $21.6 billion, which is 24.2 percent of the cumulative AUM of $89.4 billion. Fidelity commands an AUM of $11.4 billion, followed by 21Shares that has mobilized assets under management to the tune of $3.1 billion. The top 3 viz iShares, Grayscale Investments and Fidelity account for more than 63 percent of the total AUM.

The country-wise analysis shows weekly inflows of $498 million to United States. Hong Kong recorded inflows of close to $16 million followed by Switzerland with inflows of around $13.9 million. Brazil recorded inflows of $8 million. Germany however recorded outflows of close to $9 million.

Of the cumulative AUM of $89.4 billion, $68 billion or 76 percent is in United States. Switzerland follows with AUM of more than $4.6 billion whereas Canada accounts for an AUM of $4.4 billion. Germany accounts for an AUM of $3.7 billion followed by Sweden with an AUM of $2.9 billion.

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