Low Volumes for Digital Assets Indicate Investor Apathy

Takeaways

• Digital asset investment products saw minor outflows last week totalling US$27m, marking the three consecutive weeks of outflows totalling US$46m.
• While history indicates this is in part due to seasonal effects, we believe it also highlights continued apathy following recent price declines.
• Bitcoin was almost solely the focus of the outflows with a third consecutive week of outflows totalling US$29m.

Digital asset investment products saw minor outflows last week totalling US$27m, marking the three consecutive weeks of outflows totalling US$46m. It is worth noting that volumes remain very low in investment products and totalled US$901m last week, the lowest since October 2020. While history indicates this is in part due to seasonal effects, we believe it also highlights continued apathy following recent price declines.

Regionally, minor outflows were seen across the board but focussed primarily on the US, Sweden and Germany with outflows totalling US$20m, US$4.2m and US$2.3m respectively. Brazil was the only outlier, seeing minor inflows totalling US$1.2m.

Bitcoin was almost solely the focus of the outflows with a third consecutive week of outflows totalling US$29m. Investors also continue to add to short-bitcoin investment products and totalled US$1m last week. Both imply minimal but continued caution from investors which we believe is due to the ongoing hawkish rhetoric from the US Federal Reserve.

Ethereum saw minor outflows totalling US$1m and implies, despite improving confidence of the Merge occurring in September, that investors are preferring to wait for it to occur before adding to positions.

Very minor inflows were seen in Solana, Cardano, XRP, Tezos, Chainlink and Uniswap.

Contact James Butterfill at [email protected]