Record Outflows For Digital Asset Funds

Takeaways

Digital asset investment products saw outflows totalling a weekly record of US$207m. This follows the outflows that began mid-December and the 4-week run now totals US$465m, representing 0.8% of total assets under management (AuM), bringing a sharp stop to US$3.6bn of inflows that began in August 2021.

Bitcoin saw outflows totalling US$107m last week in what we believe was a direct response to the FOMC minutes which revealed the US Federal Reserve’s concerns for rising inflation, and the fear amongst investors of an interest rate hike. Over the last 4 weeks we have seen investment products representing up to 25% of total Bitcoin trading turnover, highlighting greater investor activity than usual.

Ethereum saw outflows totalling US$39m last week, bringing the 5-week run of outflows to US$200m. On a proportional basis to this is far greater than Bitcoin’s outflows representing 1.4% of AuM. The outflows from multi-asset funds totalling US$37m suggested investors were much less discerning in selling positions although Solana and XRP both saw minor inflows.

Blockchain equities investment products did not escape the negative sentiment with outflows totalling US$10m over the week.

Contact James Butterfill at [email protected]