Digital Asset Investment Products See First Week Of Outflow After 7 Weeks

Key Points:

• Digital asset investment products saw a record outflow of $942 million, ending a seven-week streak of inflows.
• Bitcoin led the outflows with $904 million, alongside losses in Ethereum, Solana, and Cardano.
• Despite the downturn, total assets under management (AuM) remain at $88 billion, with mixed global impacts.

Digital asset investment products experienced a significant shift in investor sentiment last week, marking the first outflow in seven weeks, totaling a record $942 million.

Record Outflows Signal Shift in Digital Asset Investment Products

This follows a remarkable streak of inflows of digital asset investment products totaling $12.3 billion. Despite high trading volumes reaching $28 billion, down by two-thirds from the previous week, the recent price correction has caused a dent of $10 billion in total assets under management (AuM), which now stands at $88 billion, still above the previous cycle highs.

The downturn in prices led to investor hesitancy, particularly impacting new ETF issuers in the US, which witnessed reduced inflows totaling $1.1 billion. This somewhat offset the substantial $2 billion outflows from incumbent Grayscale.

Varied Trends in Digital Asset Investment Flows

The negative sentiment wasn’t confined to the US alone; countries like Sweden, Switzerland, Hong Kong, and Germany experienced outflows of $37 million, $25 million, $35 million, and $4 million, respectively. However, Brazil and Canada bucked the trend, seeing inflows totaling $9 million and $8.4 million, respectively.

Bitcoin dominated the outflows, constituting 96% of the total, with a significant $904 million. Short Bitcoin products also experienced minor outflows of $3.7 million.

Other major cryptocurrencies like Ethereum, Solana, and Cardano also suffered losses, with outflows of $34 million, $5.6 million, and $3.7 million, respectively. However, the rest of the altcoin space witnessed a net inflow of $16 million, with notable performers being Polkadot ($5 million), Avalanche ($2.9 million), and Litecoin ($2 million).