Crypto and Digital Asset Investments See Second Week of Inflows

Digital asset and crypto investment products saw inflows for a second week in a row in the new year, albeit a rather weak $19 million.

Although small, “it continues to suggest investors are beginning to cautiously add to positions at these depressed price levels,” according to the latest CoinShares report. The report also acknowledged an increasing price sensitivity to monetary policy statements, highlighting the recent FOMC meeting having made an immediate intraday price response.

Bitcoin-based investment products saw inflows for the second week in a row, which amounted to $22 million. Meanwhile, total crypto assets under management (AuM) recovered to $31 billion after hitting their lowest point since July 2021 last week at $29 billion.

Ethereum-based investment products on the other hand continue to bleed, with the $27 million in outflows last week running up the eight-week total to $272 million, which represent roughly 2.4% of AuM. “While alarming, this current retrenchment remains a way off the outflows seen in February 2018 where outflows totaled 10% of AuM,” the report contended.

Finally, Solana, Polkadot and Cardano all saw outflows last week, which may have suggested to the report that investors are shunning altcoins. However, it did note that multi-asset funds (a combination of coins) saw inflows totalling $32 million, the largest amount since June 2021, which suggested a more diversified investment approach from investors. Blockchain equity investment products also saw inflows totalling $15 million.

Last week’s report highlighted the first week of inflows into digital asset investment products this year. While only amounting to $14.4 million in inflows, that week saw a break in a five-week streak of outflows that totaled $532 million.

When it started in mid-December, that streak of outflows had ended a run of 17 consecutive weeks of inflows which had in August 2021, eventually totaling $3.6 billion.