Digital Asset Investment Products See Significant Outflows of $32m, the Highest Since Late 2022 : CoinShares

By Tsunami On Feb 20, 2023

Last week, the digital asset investment products market experienced outflows totalling $32m, marking the highest weekly outflows since December 2022. This is according to the Digital Asset Fund Flows Weekly Report. Although the outflows were initially much higher, reaching $62m mid-week, the sentiment improved by Friday, with inflows of $30m.

Notably, the negative sentiment was concentrated on Bitcoin, which saw outflows totalling $25m, while short-Bitcoin investment products saw inflows of $3.7m. Despite the outflows, the broader market saw positive price appreciation, with Bitcoin prices rising by 10% over the week. This led to a surge in total assets under management (AuM) to $30bn, their highest level since August 2022.

One explanation for this dichotomy is that exchange-traded product (ETP) investors may be less optimistic about recent regulatory pressures in the US compared to the broader market. On the other hand, short-Bitcoin investment products saw some of the largest inflows of the year, totalling $38m, second only to Bitcoin with $158m.

The negative sentiment was not limited to Bitcoin, however. Ethereum, Cosmos, Polygon, and Avalanche all saw outflows totalling $7.2m, $1.6m, $0.8m, and $0.5m, respectively. Meanwhile, Aave, Fantom, XRP, Binance, and Decentraland all saw inflows between $0.36m and $0.26m.

In contrast to digital assets, blockchain equities saw inflows totaling $9.6m last week and have seen six consecutive weeks of inflows, indicating a more constructive sentiment among investors.

Overall, the mixed sentiment in the digital asset investment products market could be reflective of investors’ uncertainty in the face of regulatory pressures and other external factors. As the market continues to evolve, it remains to be seen how investors will respond and adjust their portfolios accordingly.

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