Bitcoin Funds Record Sixth Consecutive Week of Net Outflows Despite Market Rally
Bitcoin and other digital asset investment products saw net outflows last week despite a market rally that took Bitcoin’s price above the $28,000 threshold for the first time since June 2022, the latest weekly CoinShares report showed. This was the sixth consecutive week of net outflows for bitcoin funds, totaling $424 million during that period.
Digital Asset Funds had $95 million in payouts last week
Digital asset funds recorded a sixth consecutive week of net outflows last week, at $95 million, according to CoinShares. This brings the total over the past five weeks to $406 million, representing approximately 1.2% of total assets under management (AuM). AuM has grown 26% in the past week to $33 billion, the highest since the June 2022 Three Arrows Capital (3AC) crash.
Similar to the previous week, Bitcoin was at the center of negative investor sentiment, with the investment product seeing outflows of $113 million last week, up from $424 million over the past six weeks. Despite the payouts, total assets under management increased by 32% last week.
Meanwhile, short-bitcoin investment products saw record inflows of $35 million during the week, but assets under management fell 13% during the period. Ethereum and multi-asset investment products also recorded outflows of $12.7 million and $5.2 million, respectively.
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Bitcoin breaks $28,000 amid persistent banking woes
The sixth consecutive week of outflows comes in the face of the latest crypto rally that pushed Bitcoin above the $28,000 mark for the first time since June 2022. Other coins, including Ether, Solana, Cardano and Polygon, also rose higher.
The latest crypto rally comes amid growing concern about the state of the global banking industry after several global central banks said over the weekend they would inject money into markets to boost liquidity. Meanwhile, Swiss authorities orchestrated an emergency takeover of struggling Swiss lender Credit Suisse by rival UBS following a string of bank collapses this month.
But the sentiment against digital asset funds remains at odds with the rest of the crypto market, a similar line of situation during the March 2020 coronavirus outbreak.
Germany and Canada led outflows on a regional basis, recording $24.3 million and $12.8 million respectively last week. The US recorded smaller outflows of just $0.4 million.
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Why do you think there was a gap in sentiment towards cryptocurrencies and digital asset funds? Let us know in the comments below.
About the author
Tim Fries is the co-founder of The Tokenist. He has a B. Sc. in mechanical engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate in the investment team at RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
