Crypto assets under management at lowest point since July 2021
Crypto investment products registered outflows for a second consecutive week, the bulk of which came from bitcoin funds, according to data from digital asset manager CoinShares.
The data highlights investors’ cautious sentiment on the cryptocurrency sector as the bearish trend continues, it says.
Crypto outflows hit $141 million in the week ended May 20, with bitcoin reaching $154 million in outflows. However, year-to-date and month-to-date flows remain net positive at $307 million and $187 million respectively.
Other crypto and digital investment products such as Ripple, Polkadot and Solana did show minor inflows for the week, netting $0.7 million, $1.0 million and $1.0 million respectively. The same trend continued with outflows predominantly coming from North American providers, with outflows comprising $154 million while flows in Europe were broadly flat, coming in at $12.4 million.
Overall, total assets under management (AuM) now stands at $38 billion, their lowest point since July 2021.
“Digital asset investment products saw outflows totalling $141m last week. The ongoing volatility has led to fickle investors with some seeing this as an opportunity while the aggregate sentiment is predominantly bearish,” CoinShares said.
Ether, the token used in the Ethereum blockchain, also saw outflows of nearly $0.3 million last week, its second straight week of outflows, data showed. Year-to-date investment into ether products still shows outflows at $234 million, representing 2.7 percent of assets under management (AUM).
CoinShares’ revenue growth slammed into reverse
Ethereum’s market share has suffered in recent months due to Bitcoin’s dominance, and the recent combination of price drop and outflow has seen their AUM fall to $8.6 billion from a record $20 billion. As a result, Ethereum now represents 22.7 percent of the capital locked in crypto investment products.
CoinShares made headlines earlier this month after it reported a drop in the first quarter from the previous one, weighed down by a decline in institutional investors’ interest in cryptocurrency trading.
Europe’s largest crypto asset manager said combined revenue, gains and other income was reported at £27.96 million, down from Q1 2021’s £39.91 million. Adjusted EBITDA also halved to £18.7 million from £34.2 million in the three months through March 2021.
In the fourth quarter, CoinShares notched its highest quarterly earnings after surging crypto markets drove significant growth in its assets under management. However, due to lower demand for digital asset investment products, ETP assets under management (AUM) dropped to £3.07 billion from £3.4 billion as of 31 March 2022.
As the market environment has changed in the past three months, with cryptocurrencies under pressure, the institutional-favorite platform has experienced difficulties gaining confidence from investors.