Market remains resilient with $308M in inflows despite turbulence

Crypto investment products experienced $308 million in net inflows last week, marking the eleventh consecutive week of positive movement, according to CoinShares’ latest weekly report.

However, the week was not without turbulence. On Dec. 19, the industry recorded the most significant single-day withdrawal of $576 million. This tumultuous activity culminated in nearly $1 billion exiting the market in the latter part of the week.

James Butterfill, CoinShares’ head of research, explained that the recent market downturn contributed to a $17.7 billion decrease in the total assets under management (AuM) for crypto-based Exchange Traded Products (ETPs).

According to him, this market performance appears to respond to the Federal Open Market Committee’s (FOMC) latest projections, which took a more cautious stance on monetary policy.

However, he noted that:

“While these outflows may sound alarming, they comprise just 0.37% of total AuM, ranking as the 13th largest single-day outflow on record. The largest single-day outflow took place in mid-2022, when the FOMC interest rate hike prompted $540 million outflows (2.3% of AuM.)”

Bitcoin and Ethereum dominate

Bitcoin continued to dominate investor interest, pulling in $375 million in inflows despite experiencing days of outflows during the week.

Similarly, Ethereum maintained strong momentum, securing $51 million in inflows, pushing its month-to-date total above $2 billion. Year-to-date inflows for Ethereum now stand at $4.5 billion, reflecting steady confidence from investors.

In contrast, Solana saw outflows of $8.7 million, contributing to a negative monthly total of $22 million. Multi-asset investment products faced the steepest declines, losing $121 million in outflows last week.

However, some altcoins bucked the trend, with XRP, Horizen, and Polkadot recording inflows of $8.8 million, $4.8 million, and $1.9 million, respectively. Butterill noted that this suggests a targeted approach among investors, focusing on specific assets despite broader market challenges.

Meanwhile, institutional trends also revealed divergent strategies. BlackRock’s iShares ETF attracted over $1.5 billion in inflows, standing out as a significant positive mover. Meanwhile, Grayscale and Fidelity ETFs experienced notable outflows of $339 million and $293 million, respectively.

Mentioned in this article