Institutional Exodus: Crypto Fund AUM Fell to Lowest Levels in 10 Months

Institutional funds are still flowing out of crypto products, so much so that over the past week, the total assets under management (AUM) figure fell to a ten-month low.

CoinShare’s weekly ‘Digital Asset Fund Flows’ report has detailed another week with an exodus of institutional capital. The $141 million outflows have dropped the total AUM to just $38 billion. This is less than the amount just the one Grayscale fund held a few months ago.

Bitcoin-based funds bore the brunt of the outflows for the period, with $154 million exiting them. The asset itself tanked below $28,000 on two occasions and looks like it is heading that way again today following a 3.2% loss.

Weakened Risk Appetite

The report noted that the overall sentiment was bearish, with just a handful seeking opportunity from the depressed asset prices.

“The ongoing volatility has led to fickle investors with some seeing this as an opportunity while the aggregate sentiment is predominantly bearish.”

Ethereum funds were unchanged for the week, but multi-asset funds bucked the trend with an inflow of $9.6 million. There was little movement in either direction for products in individual altcoin products.

Geographically, the institutional bears were all in the Americas last week, while European investors were a little more bullish. The report noted that inflows year-to-date represent just 5.3% or $185 million of the total AUM.

“We believe investors see multi-asset investment products as safer relative to single line investment products during volatile periods,” it concluded.

On-chain metrics are also suggesting a fall in risk appetite. On May 23, institutional-grade cryptocurrency market data provider Kaiko reported that the Ethereum-to-Bitcoin price ratio had declined sharply in May, an indicator of deteriorating risk appetite.

The ratio has been used as an indicator of Bitcoin’s dominance relative to altcoin markets and has historically served as a gauge for investor sentiment, it added. According to Tradingview, Bitcoin’s dominance is just under 45%, it has gained 3.5% since the Terra collapse on May 9.

Crypto Markets Continue Downwards

Total crypto market capitalization has declined by 2.2% over the past 24 hours, falling back to $1.32 trillion, according to CoinGecko. Over the past three weeks, it has slumped a whopping 28% as half a trillion dollars has left the space.

Bitcoin and Ethereum are leading with declines of more than 3% each resulting in falls to $29,400 and $1,987, respectively.