Crypto Funds Experience Second Consecutive Week of Inflows Following $5.5 Billion Sell-Off

Summary:
Cryptocurrency investment products have shown positive momentum over the past week, marking two weeks of gains after a significant sell-off. Following a challenging period, crypto exchange-traded products (ETPs) generated substantial inflows, indicating renewed investor interest.

Key Takeaways:

Investment Growth: Crypto ETPs attracted $716 million in inflows, adding to the previous week’s $1 billion gain.
Market Recovery: Total assets under management (AUM) now exceed $180 billion, demonstrating an 8% recovery from November lows.
Bitcoin Dominance: Bitcoin was the primary beneficiary, drawing $352 million in inflows, while Chainlink recorded a historic inflow of 54% of its AUM.
Issuer Performance: ProShares led new investments with $210 million, while BlackRock experienced notable outflows.
Geographical Insights: The United States, Germany, and Canada saw significant inflows, while Sweden reported the highest year-to-date outflows.

Crypto funds log second week of inflows after massive $5.5B sell-off

Positive Trends in Cryptocurrency Investment

Cryptocurrency investment products have seen a resurgence, achieving two weeks of consecutive gains after enduring significant outflows. According to data from European crypto asset manager CoinShares, crypto exchange-traded products (ETPs) attracted $716 million in inflows last week, building on a robust $1 billion in the previous week.

CoinShares' Head of Research, James Butterfill, pointed out that there were minor outflows observed on Thursday and Friday. He suggested these may have been influenced by recent macroeconomic data from the US that indicated ongoing inflation concerns.

This influx of capital has helped push total assets under management (AUM) in the crypto space above $180 billion, representing an 8% recovery from recent lows observed in November, when the market experienced a robust sell-off totaling $5.5 billion over four weeks. Despite this recovery, AUM still falls short of its peak of $264 billion, according to Butterfill.

Bitcoin and Chainlink Drive Inflows

Leading the inflow gains among crypto ETPs was Bitcoin, which attracted an impressive $352 million in inflows last week. XRP funds followed closely with $244 million. Notably, Chainlink made headlines by achieving a record inflow of $52.8 million, accounting for 54% of its total AUM.

Weekly crypto ETP flows by asset as of Friday (in millions of US dollars). Source: CoinShares

Ether funds lagged behind with modest inflows of $39 million, while short Bitcoin ETPs saw around $19 million in outflows, which might suggest a shift towards a more positive investor sentiment.

ProShares and BlackRock: Opposing Trends

Among investment issuers, ProShares led the charge with $210 million in new inflows. In contrast, BlackRock, the largest issuer by assets under management, faced $105 million in outflows. Additionally, Cathie Wood’s ARK Invest and Grayscale Investments saw outflows of $78 million and $7 million, respectively, during the same period.

Weekly crypto ETP flows by issuer as of Friday (in millions of US dollars). Source: CoinShares

From a geographical perspective, inflows were mostly positive across the globe. The US, Germany, and Canada stood out with inflows of $483 million, $97 million, and $80.7 million, respectively.

However, Sweden experienced $5.6 million in outflows last week, contributing to a total of $836 million in year-to-date outflows, making it the country with the highest outflows globally.

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