Digital Assets Saw $433M of Inflows in 2022

Takeaways

• Digital assets saw inflows totalling US$433m for the whole of 2022, the lowest since 2018 when there were inflows of only US$233m.
• In a year where bitcoin prices fell by 63%, a clear bear market precipitated by irrational exuberance and an overly hawkish FED, it is encouraging to see investors on the whole still choosing to invest.
• 2022 saw the emergence of short-investment products which saw inflows of US$108m, they remain a niche asset which represent only 1.1% of total Bitcoin AuM.

Digital assets saw inflows totalling US$433m for the whole of 2022, the lowest since 2018 when there were inflows of only US$233m. Proportionally, the mid-year outflows in early 2018 were far more aggressive than they were in 2022 with total weekly outflows at one point reaching 1.8% of total assets under management. In comparison, the outflows in 2022 reached a weekly peak representing only 0.7% of AuM. Regardless, the inflows were significantly lower than 2021 and 2020 when there were inflows of US$9.1bn and US$6.6bn respectively.

In a year where bitcoin prices fell by 63%, a clear bear market precipitated by irrational exuberance and an overly hawkish FED, it is encouraging to see investors on the whole still choosing to invest, and in many cases tactically adding to positions during price weakness.

Bitcoin and multi-asset investment products were the main beneficiaries, seeing inflows totalling US$287m and US$209m respectively. Ethereum had a tumultuous year which we believe was due to investor concerns over a successful transition to proof of stake and continued issues over the timing of un-staking, which we believe will occur in Q2 2023.

2022 saw the emergence of short-investment products which saw inflows of US$108m, they remain a niche asset which represent only 1.1% of total Bitcoin AuM.

Contact James Butterfill at [email protected]