• Digital asset investment product outflows reached a record weekly level, according to a report by CoinShares.
• The outflows increased for a fifth consecutive week and totaled $255 million, representing 1% of total assets under management (AUM).
• Outflows have wiped out all of the inflows from earlier this year, with outflows totaling $82 million year to date.
Crypto Fund Outflows Hit Record Weekly Level
The digital asset investment firm CoinShares reported that crypto fund outflows hit record levels in the past week. Outflows rose for a fifth consecutive week and totaled $255 million, which is 1% of total assets under management (AUM). Bitcoin was the primary focus for these outflows, with some $244 million leaving crypto funds. Although the outflows are the largest on record when expressed as an absolute dollar amount, they still lag behind May 2019’s figure of 1.9% of AUM.
Recent Uncertainty in Crypto Market
This comes as the crypto market has suffered a month of uncertainty due to events such as Silvergate collapsing and investor concerns regarding US banking sector health. These factors combined have led to all inflows from earlier this year being wiped out by current net-outflow figures totalling $82 million year to date.
CoinDesk Markets Reporter’s Take
CoinDesk Markets reporter Lyllah Ledesma holds bitcoin, ether and small amounts of other crypto assets. She noted that while it isn’t unusual for investors to take profits after prices rise significantly over a short period — like BTC did in recent weeks — there could be other underlying factors driving these large-scale withdrawals from cryptofunds such as investors trading their positions for fiat or other cryptos or cashing in on their investments altogether.
Alex Thorn’s Insight at Consensus 2023
Head of Firmwide Research Alex Thorn will share his take on “Bitcoin and Inflation: It’s Complicated” at Consensus 2023 later this year. He is likely to give his insight into how inflation affects Bitcoin price movements and potential solutions for mitigating its effects on BTC’s performance moving forward.
The current state of crypto fund outflows paints an uncertain picture for digital asset investors moving forward despite recent gains in Bitcoin prices over the past few weeks. As more data emerges regarding underlying causes and potential solutions come into play, we may get more clarity on where the market is heading next.