Crypto funds see increased outflows as investor sentiment sours

• Last week’s outflows from digital asset investment products were $59 million.
• For the first time in 19 weeks, short-Bitcoin products recorded inflows. 

Digital asset investment products recorded outflows totaling $59 million last week, marking the fourth consecutive week of outflows. This brought total outflows in the last month to $294 million, digital asset investment firm CoinShares found in a new report.

Last week’s $59 million capital flush from crypto funds represented 0.9% of total assets under management (AuM). According to the report, this was $31.72 million within the period under review.

Further, last week was marked by a significant decline in trading volume. CoinShares found that it plummeted by almost 75%, with total trades completed being just $754 million. 

BTC’s troubles are not over

Bitcoin [BTC] investment products saw the removal of $69 million last week, after it recorded a minor $4 million in inflows. Last week’s liquidity exit brought the coin’s month-to-date outflows to $72.4 million.

Interestingly, despite BTC’s narrow price movements in the past several months and the poor sentiment that has ravaged the market, the year-to-date (YTD) flows into BTC investment products remained at a net positive of $200 million, CoinShares found. 

Bringing an end to its 19th consecutive week of consecutive outflows, short-Bitcoin products saw inflows for the first time in four months. As contained in the report, this asset category registered inflows of $15.2 million,

“Its largest single week of inflows since March 2023.”

CoinShares further added:

“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.”

Despite the significant capital exit suffered by short-Bitcoin products in the last few months, its YTD flows also remained at a net positive of $50 million, ranking as the second-highest after BTC.

Funds exit Ethereum unabated

Last week, leading altcoin Ethereum [ETH], witnessed withdrawals amounting to $4.8 million. This brought its YTD outflows to $108 million. 

The funds removed represented 1.6% of the coin’s AuM, making it the,

“Least-loved digital asset among exchange-traded product (ETP) investors this year.”

Solana [SOL] saw outflows of $1.1 million for the first time in nine weeks. Per its previous report, CoinShares had found that SOL’s nine-week inflows made the altcoin,

“The most loved altcoin amongst investors at present.”