Crypto investment products saw $528 million in net weekly outflows amid recession fears: CoinShares

Global crypto investment products at asset managers such as Ark Invest, Bitwise, BlackRock, Fidelity, Grayscale, ProShares and 21Shares registered net outflows for the first time in a month last week, totaling $528 million, according to CoinShares' latest report.

The outflows were “a reaction to fears of a recession in the US, geopolitical concerns and consequent broader market liquidations across most asset classes,” CoinShares Head of Research James Butterfill said. “The price correction from Friday’s close saw $10 billion wiped off total ETP AUM.”

Weekly crypto asset flows. Images: CoinShares.

Bitcoin dominates while Ethereum investment products keep bleeding

Bitcoin-based products dominated, accounting for $400 million of the net outflows following five consecutive weeks of net inflows. Short Bitcoin funds also saw the first significant net inflows since June, adding $1.8 million.

The U.S. spot Bitcoin exchange-traded products represented just $80.6 million of the global outflow total, driven by $237.4 million worth of net outflows on Friday, which surpassed net inflows earlier in the week.

Ethereum investment products witnessed net outflows of $146 million last week globally, dominated by $169.4 million in net outflows from U.S. spot Ethereum ETFs. However, this figure masks the $433.6 million of net inflows into the new Ethereum ETFs, overwhelmed by $603 million in net outflows from Grayscale’s converted and higher-fee fund, ETHE. Total net outflows since the funds began trading last month now exceed $500 million.

Regionally, U.S.-based funds saw the most net outflows, losing $531 million globally. Hong Kong and Germany-based crypto investment products also saw net outflows of $27 million and $12 million, respectively. However, the price weakness was seen as an opportunity to add to digital asset products in Switzerland and Canada, Buterfill said, with those markets seeing net inflows of $28 million and $17 million.

Crypto-related equities also continued to see outflows last week, with $18 million pulled, in line with outflows from broad tech-related ETFs, Butterfill added.

Crypto market losses exacerbate

Last week’s price declines in the crypto market were exacerbated over the weekend before falling dramatically on Monday morning — with bitcoin plummeting below $50,000 at one point — while ether lost all its year-to-date gains as its price dropped below $2,200. 

Bitcoin is currently trading for $51,723, according to The Block’s Bitcoin Price Page, down 15% over the past 24 hours and 25% this last week. Ether is changing hands for $2,279 per The Block’s Ether Price Page, down 22% in the last 24 hours and 32% over the last seven days. Meanwhile, the GMCI 30, which represents a selection of the top 30 cryptocurrencies, has fallen 18% over the last 24 hours to 95.96, losing 28% over the past week.