Investors are fleeing crypto funds at a record pace despite Bitcoin’s bullish swing
Investors are pulling out of funds exposed to digital assets at a record clip, despite the bullish rally in Bitcoin and other cryptocurrencies this year.
Last week brought the fifth consecutive week of outflows from investment products that hold digital assets, with a net $255 million leaving such funds, according to analysis by digital asset manager and trade group CoinShares
.
It represents the largest single week of outflows on record and 1% of total assets under management.
These funds are usually exchange-traded products that offer investors a way to gain exposure to digital assets such as
Bitcoin
or
Ether
without actually holding crypto, such as Grayscale Bitcoin Trust, which trades in the US on over-the-counter markets.
The focus of selling fell heavily on Bitcoin, the largest digital asset, which saw $244 million in fund outflows. But it wasn’t even just the bulls that retreated, but bears as well. There were notable outflows from short-Bitcoin funds betting against prices.
Crypto-focused asset manager 21Shares has also recently closed five exchange-traded crypto products and removed another. The move is standard in the exchange-traded product industry, said a spokesperson for the company, and is due to an analysis of customer demand with the relevant funds making up less than 1% of the group’s total assets.
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21Shares added that it continues to see inflows this year, logging its second-best January in company history, surpassing 2022 even though crypto prices were much lower across the board. But the data from CoinShares, which showed more than $16.3 million flowing out of 21Shares funds in March, confirms that the recent trend is one of assets fleeing the crypto fund space.
What is notable about the withdrawals from crypto funds is that it runs counter to price action across spot markets for Bitcoin and other digital assets themselves.
Bitcoin this week had its best four-day stretch since February 2021, and has steadily gained nearly 60% so far this year. It has been much the same across the crypto landscape, with the total market value of digital assets rising to over $1.1 trillion from under $800 billion since the start of 2022.
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Write to Jack Denton at [email protected]
