Weekly Crypto Outflows Hit Record High

The crypto market has lost nearly 30% of its value since 10 November 2021. During the recent correction, Bitcoin dipped below $46,000 and Ethereum reached a low of nearly $3,600. While institutional investors supported the crypto market with major inflows throughout the recent dip, last week saw significant outflows from BTC and ETH investment products.

Weekly cryptocurrency outflows reached a record high of $142 million. Last week, digital asset investment products saw outflows for the first time in 17 weeks.

However, the latest outflows represent just 0.23% of the overall crypto assets under management (AUM). Bitcoin-related investment products witnessed outflows worth $89 million in the last week. Moreover, Ethereum-related outflows totaled $64 million.

“While this outflow appears alarming, there are several points to consider. Firstly, it comes at a time where there have been considerable outflows across all risk assets following the recent US Federal Reserve statement on tapering. Secondly, outflows represent only 0.23% of total assets under management (AuM), and from a historical perspective are small relative to the outflows in early 2018 where weekly outflows represented up to 1.6% of AuM. Finally, the outflows come at a time of record yearly inflows peaking at US$9.5bn, relative to inflows totaling US$6.7bn in 2020,” CoinShares noted in its weekly report.

Altcoins

While Bitcoin and Ethereum struggled due to major outflows last week, crypto-assets like Solana (SOL) and Polkadot (DOT) stood strong. In fact, SOL and DOT attracted $6.7 million and $2.5 million, respectively. Also, the total value of global digital assets under management dropped to $63 billion last week.

“Bitcoin saw outflows totaling US$89m, well below the outflows seen in June where they were as much as US$150m. Ethereum saw record outflows totaling US$64m and has in the past countered Bitcoin’s outflows. Other altcoins softened the blow with Solana, Polkadot and multi-asset investment products seeing inflows totaling US$6.7m, US$2.5m, and US$1.5m, respectively,” the report added.