Crypto funds break 17-week inflow, post biggest outflow on record

The largest previous outflow on record was in early June 2021 with weekly outflows totaling $97 million.

The sell-off in digital asset investment products or crypto funds, which are generally preferred by institutional investors, came amid a broad correction in the crypto market.

Amid risk-off sentiment in global financial markets due to rising inflation and a rise in fresh COVID cases across the globe, bitcoin has plunged from a high of nearly $69,000 to below $46,000 in the past month.

During December 11-17, the world’s largest crypto asset, bitcoin, declined in price by about 6%. Notably, bitcoin-based funds saw total outflows of $89 million during this period, but were significantly lower than the outflows seen in June, where they stood at $150 million.

Although this outflow appears alarming, according to Digital Asset Manager there are several points to consider.

“First of all, this comes at a time when there has been a significant outflow of all risk assets following the recent US Federal Reserve tapering statement. Second, outflows represent only 0.23% of total assets under management (AUM), and historically small relative to outflows at the beginning of 2018, where weekly outflows represented up to 1.6% of AUM,” CoinShares said. said in a report.

Additionally, outflows peaked at $9.5 billion at a time of record annual inflows, relative to a total of $6.7 billion in 2020 inflows.

However, the total sell-off was softened by buying into altcoins, a cumulative term to define cryptocurrencies that came after bitcoin, such as Solana, Polkadot and multi-asset investment products, with a total of $6.7 million, $2.5 million and $6 million in total. Seen net purchases of $1.5 million. ,

However, the largest altcoin, Ethereum, saw a record outflow totaling $64 million during the week ended December 17th.

In terms of crypto fund providers, the world’s largest digital asset manager, Grayscale, held steady with total assets under management (AUM) of $43.68 billion, followed by CoinShares with an AUM of $4.99 billion and 3iQ with an AUM of $2.60 billion. .

The total AUM of crypto fund providers for the week was $63.02 billion.