As much as $55 billion in capital exited the crypto market in August, while both trading volumes and volatility remained at suppressed levels, a new report has revealed.
According to the report, published by crypto exchange Bitfinex on September 11, the massive outflows came from three major pillars of the crypto market, namely Bitcoin (BTC), Ethereum (ETH) and various stablecoins.
The outflows happened as Bitcoin formed its “largest red monthly candle” since the bottom of the current bearish cycle was reached in November 2022, sending the price down by 11.29% on a monthly basis.
Return of ‘event-based volatility’
Despite the overall bearish price action during the month, Bitfinex also said in the report that August has shown that ‘event-based volatility’ has finally returned to the crypto.
The return of event-based volatility is evidenced by the market flash crash on August 17, followed by a price pump on August 29 on the news that digital asset manager Grayscale won a lawsuit against the Securities and Exchange Commission (SEC), opening a door to a spot Bitcoin exchange-traded fund (ETF).
Notably, Bitcoin derivatives markets also saw increased activity, with for instance Bitcoin open interest (OI) sustaining itself “better than almost the entire market,” the report said.
It added that this is likely due to both institutional interest and “wash trading” on certain crypto exchanges.
“Now that crypto derivatives markets are more mature, they can be seen not just as transactional hubs but also crucial barometers, providing insights into market sentiment,” Bitfinex said about the development.