Digital Asset Sentiment Remains Poor, With $59M in Outflows Last Week

Digital Asset Sentiment Remains Poor, With $59M in Outflows Last Week

Concerns about regulation and a strong U.S. dollar are crimping investments.

JamesButterfill310x310
|
Head of Research and Investment Strategy
|
Reviewed by: Ron Day
,
Edited by: Mark Nacinovich
  • Digital asset investment products had $59 million in outflows last week, according to CoinShares, a provider of digital-asset exchange-traded products. The asset class has had $259 million in outflows over the past four weeks. 
  • Bitcoin suffered the most, with $69 million in outflows last week, while short bitcoin saw its largest single week of inflows since March, with $15 million in inflows. 
  • Blockchain equities didn’t escape the negative sentiment, with $10.8 million in outflows, the fifth consecutive week of outflows for the category.

 

Digital asset investment products saw outflows totalling US$59m last week, marking the fourth consecutive week of outflows, this run of outflows now totals US$294m and represents 0.9% of total assets under management (AuM). Inflows were also seen in short investment products, suggesting sentiment remains poor for the asset class. We believe continued worries over regulation of the asset class and recent dollar strength are the most likely reasons for this. 

 

Trading volumes also dropped significantly, by 73% in comparison to the prior week to just US$754m for the week. Bitcoin suffered the most, seeing outflows of US$69m last week, while short-bitcoin saw its largest single week of inflows since March 2023, totalling US$15m. Timing wise this is interesting as the inflows in March also came at a time of heightened regulatory uncertainty. 

 

Ethereum also suffered, seeing outflows totalling US$4.8m. This brings year-to-date outflows to US$108m, representing 1.6% of AuM, demarcating it as the least loved digital asset amongst ETP investors this year. Conversely, XRP continued to see inflows totalling US$0.7m last week. Blockchain equities did not escape the negative sentiment, with US$10.8m outflows, marking the 5th consecutive week of outflows.

 

 

 

 

James Butterfill has over 19 years of experience in fund management, investment banking, economics and asset allocation, gained most recently as an investment strategist at CoinShares. Previously, he was head of research at ETF Securities, with prior experience as a multi-asset fund manager and investment strategist at Coutts & Co., HSBC & ING Barings. James is a regular media commentator, and frequently appears on Bloomberg TV, CNBC, BBC and other broadcast outlets. Investment Week awarded him best ETF Eesearch and best FX Research in 2016 and 2017, respectively. James is currently an investment strategist at CoinShares, writing research white papers on investment themes, identifying investment opportunities and helping investors understand the digital asset world.