Investment products based on Bitcoin registered the most significant outflows for a total of £78.7 million. According to the most recent CoinShares report, this was “a direct response to the FOMC minutes which revealed the US Federal Reserve’s concerns for rising inflation, and the fear amongst investors of an interest rate hike.” The analysis also noted an increased turnover in Bitcoin backed assets during the previous four weeks, indicating stronger investor activity than usual.
Last week’s outflows were widespread, hitting almost all other crypto products. Around £28.7 million in outflows contributed to a five-week outflow streak reaching £147 million in Ethereum investment products. According to the report, this is proportionally bigger to Bitcoin outflows, which account for about 1.4% of assets under management (AuM). The £27.2 million in withdrawals across multi-asset class, as well as the £7.35 million in losses for blockchain equities investment products, show the sheer size of the crypto selloff.
Solana and XRP, on the other hand, both reported tiny inflows.
This is the fourth week in a row in a new outflow streak that began in December and now totals £342 million. This amounts to almost 0.8% of total AuM, which is nearly double the sum of the previous three weeks’ outflows.
Despite the year ending on a note of three weeks in a row of outflows, 2021 was a year of big gains for crypto investment products.
December’s last week tapered off into £23.5 million, down from £63.2 million the week before and £104 million in the second week of the month. Total outflows over the course of the last three weeks of 2021 were £191 million, or 0.4% of AuM. The first week of outflows brought a stop to a 17-week streak of inflows. The inflows into digital investment products, which began in August last year, totaled £2.65 billion.