Institutional investors pull money out of crypto funds after seven-week run of inflows
Breaking down outflows in terms of asset class, $69.6 million exited Bitcoin amid low volumes followed by $50.6 outflows from Ether. Outflows from other coins including Solana, Ripple, Polkadot were modest at $0.3 million, $0.7 million, and $0.9 million respectively.
After seven week-run of inflows by institutional investors, cryptocurrencies and crypto funds last week recorded outflows totalling $110 million, highlighting regulatory concerns continue to be a key issue for digital assets, said investment firm CoinShares in a synopsis covering digital asset investment flows for the week ended March 11. Out of the total outflows, $80 million were derived from North America that began at the start of last week, suggesting to be in response to the US President Joe Biden’s executive order that called for studying the risks and benefits related to cryptocurrencies.
The executive order, signed on March 9, largely called for measures related to assessing potential financial and economic risks including challenges related to illicit use of digital assets and also developing the right policy recommendations to protect the US consumers, investors, and businesses. The order also focused on pushing for the country’s leadership in digital asset technology. It further called for exploring a US central bank digital currency (CBDC).
The remaining $30 million outflows were seen in Europe. While the reasons are unclear but regulatory concerns and geopolitics remain at the forefront of investors’ concerns for digital assets, said CoinShares.
Breaking down outflows in terms of asset class, $69.6 million exited Bitcoin amid low volumes followed by $50.6 outflows from Ether. Outflows from other coins including Solana, Ripple, Polkadot were modest at $0.3 million, $0.7 million, and $0.9 million respectively even as Cardano and Litecoin each reported inflows of $0.2 million.
Multi-asset or multi-coin products and blockchain equity investment products also saw inflows amounting to $12 million and $4.1 million last week. In fact, the two were the most popular among investors with inflows representing 3.2 per cent and 6.7 per cent of assets under management (AuM) respectively. Total crypto AuM last week stood at $48,627 million.
Importantly, till the first week ended March 4, investors seemed to have remained committed to crypto products and funds despite the geopolitical events. Inflows into digital asset investment products had totalled $127 million during the week, an uptick from the previous week, “suggesting investors remained supportive of digital assets,” CoinShares had noted. The weekly inflows during the week were led by Bitcoin with $95 million poured in by investors –the largest single weekly inflow since early December 2021.
