Goldman Sachs Revises Estimate for Net Inflows into Digital Assets - SEO Optimized Title
Goldman Sachs recently updated its estimate for net inflows into digital assets year-to-date (YTD), lowering the figure from $12 billion to $8 billion. This adjustment comes after a thorough reassessment of various contributing factors in the market over the past month.
Initially, the $12 billion estimate in mid-June was based on a combination of inflows into cryptocurrency funds, CME futures flow, fundraising by crypto venture capital funds, and adjustments for the shift to new spot ETFs from digital wallets.
The revised $8 billion figure now includes a $14 billion net inflow into crypto funds by July 9, a $5 billion flow impulse from CME futures, and $5.7 billion raised by crypto venture capital funds YTD. However, there was a significant $17 billion adjustment due to the shift from digital wallets to spot Bitcoin ETFs, which offer cost-effectiveness and regulatory protection.
The decrease in Bitcoin reserves on exchanges, estimated at 0.29 million bitcoins or $17 billion by CryptoQuant on July 9, indicates a shift away from exchange wallets. This could be due to liquidations by entities like Gemini, Mt. Gox, or the German government, selling Bitcoin seized in criminal activities.
Goldman Sachs had anticipated a decline in the $12 billion estimate, given high Bitcoin prices relative to production costs and its value compared to gold. The firm expects these liquidations to diminish after July, maintaining a positive outlook for the cryptocurrency market and predicting a rebound from August onwards.
In conclusion, this analysis highlights the recent revision in net inflows into digital assets by Goldman Sachs and the factors contributing to this adjustment. Understanding these market dynamics can help individuals make informed decisions regarding their investments and financial strategies.