Digital Asset Funds See Outflows as Trading Volumes Surge
Despite a surge in trading volumes, digital asset funds experienced minor outflows of $21 million over the past week as crypto prices dropped. CoinShares’ Digital Asset Weekly Fund Flows report revealed a decline in bullish momentum, although there were inflows across various products and jurisdictions.
Incumbent, higher cost Bitcoin issuers suffered in the US, seeing US$2.9bn of outflows, while newly issued ETFs have now seen a total of US$4.13bn inflows since launch.
— James Butterfill (@jbutterfill) January 22, 2024
Institutional Products Benefit from Spot Bitcoin ETF Approvals
Institutional products have seen significant inflows following the approval of spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC). Outflows of $20.8 million bring yearly inflows to $1.356 billion, with Assets Under Management (AUM) at $52.2 billion. Blockchain equities also posted positive figures of $156 million in the last seven days, while multi-assets saw inflows of $9.4 million.
“These newly issued ETFs have now seen a total of $4.13 billion inflows since launch, outstripping that lost from the higher cost incumbent ETPs. Investors saw a recent price weakness as an opportunity to add to short Bitcoin investment products, seeing $13 million inflows.”
Bitcoin and Altcoin Digital Assets Experience Losses
Bitcoin products saw losses of $25 million, bringing monthly inflows to $1.27 billion. The approval of spot BTC ETFs played a role in this figure. Bitcoin’s current trading price is $40,619, representing a 4.66% drop in the last seven days. Altcoins like Ethereum (ETH), Solana (SOL), and Litecoin (LTC) also experienced outflows as their prices declined.
Geographical Trends in Digital Asset Flows
The United States recorded $263 million in inflows, while Canada and Germany experienced outflows of $165.4 million and $98.4 million, respectively.
Hot Take: Digital Asset Investment Products Face Outflows Despite High Trading Volume
Digital asset funds have seen a minor outflow of $21 million despite a surge in trading volumes reaching $11 billion. This comes as crypto prices have dropped, leading to a decline in bullish momentum. However, institutional products have benefited from the approval of spot Bitcoin ETFs by the SEC, resulting in significant inflows. Bitcoin and altcoin digital assets have experienced losses, with altcoins like Ethereum, Solana, and Litecoin seeing outflows due to declining prices. Geographically, the United States has recorded inflows while Canada and Germany saw outflows. Overall, the market remains dynamic with various factors impacting digital asset investment flows.
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