Digital Asset Investment Products Witness Sixth Consecutive Week of Outflows, Totaling $39 Million: Coinshares

By 0xK2 05/30/23 1:37 PM

In the ever-evolving world of digital assets, investment products experienced yet another week of outflows, marking the sixth consecutive week of decline.

According to the Digital Asset Fund Flows Weekly Report by Coinshares, a total of $39 million flowed out of these investment products, further contributing to the overall outflows that have now reached a staggering $272 million.

The dominant focus continues to be on Bitcoin, which witnessed outflows amounting to $11 million. Interestingly, the outflows in short-bitcoin positions persisted as well, also totaling $11 million. However, it is worth noting that the outflows from short-bitcoin positions are far more pronounced, accounting for 36% of the total assets under management (AuM).

Meanwhile, the overall AuM has experienced a decline from its peak of $198 million in mid-May to $144 million at present, representing a significant 27% decrease. This decline is primarily attributed to outflows and is much greater than the 3% decline in AuM observed in long-bitcoin positions during the same period.

Altcoins, which have previously demonstrated some resilience to negative sentiment, also witnessed outflows last week. Notably, Algorand experienced the most significant outflow, with 65% of its AuM leaving the platform, equating to $8 million. Ethereum, another prominent altcoin, saw outflows amounting to $5.9 million. Nevertheless, there were minor inflows in Litecoin and Uniswap, which received $0.5 million and $0.2 million, respectively.

The report also sheds light on the overall trading volumes in the digital asset space, revealing a consistent trend of low volumes. In comparison to this year’s average, volumes remained at 58% of the norm.

Similarly, the broader digital asset market exhibited low volumes, standing at only 38% of the average. However, despite these lower volumes, investment products remained relatively more active compared to the broader market. Last week’s volumes within investment products represented approximately 8% of the total market, a significant difference from the mere 2% average.

Additionally, blockchain equities experienced minor outflows amounting to $3.4 million during the same period, further reflecting the prevalent negative sentiment.

The consecutive weeks of outflows and declining AuM indicate a lingering negative sentiment within the digital asset market. Investors appear to be cautious, resulting in reduced trading volumes and a clear focus on Bitcoin. The substantial outflows from short-bitcoin positions suggest a heightened level of concern among market participants.

As the digital asset market continues to evolve, these trends highlight the importance of closely monitoring investor sentiment and its impact on various assets. The coming weeks will undoubtedly be crucial for the industry, as market participants closely observe any shifts in sentiment and potential implications for digital assets and their investment products.

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