Crypto funds see inflows even as digital assets continue to slide

Market


Digital asset investment products or crypto funds saw net inflows of $40 million last week (30 April to 6 May) even as digital asset prices tumbled amid risk-off sentiment in the broader financial markets, digital asset manager CoinShares said.

However, inflows were lopsided with bitcoin-based funds, the primary digital asset where investors expressed more positive sentiment, witnessing net inflows totalling $45 million.

According to CoinShares, investors were taking advantage of the substantive price weakness to add to positions.

Bitcoin has at present slumped more than 50% lower compared to its all-time high of $69,044.77, which was hit in November last year, and was trading near one-year lows at around $32,000 level.

“Interestingly, we have not seen the same spike in investment product trading activity as we typically see historically during extreme price weakness periods, and it is too early to tell if this marks the end of the four-week run of negative sentiment,” said CoinShares.

Meanwhie, flows were lopsided with net inflows of $66 million in North American investment products while Europe saw net outflows totalling $26 million.

As per the report, negative ethereum sentiment continued with outflows totalling $12.5 million last week, bringing total outflows year-to-date to $207 million, representing 0.8% of assets under management (AUM).

Notably, solana was the only altcoin, a cumulative term to define cryptocurrencies that came after bitcoin, to see any measurable inflows, which totalled $1.9 million last week.

Further, a record amount of money, $4 million, flowed into short bitcoin contracts (a bet that the price will continue to fall) over the past week.

In terms of individual crypto fund providers, the world’s biggest digital asset manager, Grayscale had a total AUM of $32.28 billion, followed by CoinShares at $3.4 billion and 3iQ with an AUM of $1.91 billion. The total AUM of crypto fund providers was at $47.54 for the week ended 6 May 2022.

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