Digital asset investment products experienced their first outflow of funds in four weeks, totaling $528 million, according to CoinShares. This outflow is attributed to fears of a US recession, geopolitical concerns, and widespread market liquidations.
$400M Bitcoin Outflow and $146M Ethereum Outflow Highlight Trend
In Bitcoin funds, there was a net outflow of $400M, which is the first such situation in the past five weeks. The same was the case with Ethereum funds which recorded an outflow of $146 million. These outflows are part of a larger phenomenon that is occurring with different types of assets.
Weekly trading was $14.8bn, below average, accounting for 25% of the total market and was in Exchange Traded Products (ETPs). A drop in price from Friday close led to reduction of the total ETP assets under Management (AuM) by $10 billion.
On regional basis, the outflows were primarily in the US whereby the country recorded significant outflows of $ 531 million. Germany and Hong Kong also had negative investment flows of $12 million and $27 million, respectively. On the other hand, the market weakness made Canada and Switzerland to take advantage of it by recording $17 million and $28 million respectively. This indicates that there are some regional differences in the sentiment of investors about the current conditions as being conducive to the purchase of equities.
Digital Asset Investments Show Increased Volatility and Risk
Short-bitcoin funds saw their first net inflows since June, amounting to $1.8 million. However, the new US ETFs for Ethereum experienced positive net asset flows of $430 million, but this was balanced by negative flows of $603 million from the existing Grayscale trust thus showing a net outflow since the launch of ETFs at $430 million. Further outflows were recorded from blockchain equities which posted $18 million last week in align with tech-related ETFs.
Lastly, the findings underscore the existing risks and unpredictability of digital asset investment products in the contemporary world due to the interconnectedness of the economy. These uncertainties make investors look for other investment destinations, which caused in significant outlflows in the major digital currencies such as Bitcoin and Ethereum.
