The newest report of CoinShares, a crypto asset manager, has revealed that digital asset investment products experienced a notable shift last week as net outflows of $147 million were recorded globally, ending a three-week streak of inflows.
CoinShares revealed that these terminated inflows are not ordinary as they are the result of a notable trend in the macroeconomic space.
Detail of the fund flows: who is leading and who is not?
According to CoinShares, last week’s sudden outflow impacted major asset managers including BlackRock, Bitwise, Fidelity, Grayscale, ProShares and 21Shares, after net inflows of nearly $2 billion in the previous three weeks.
The outflow was largely led by Bitcoin-based fundswhich was responsible for $159 million in net outflows. In contrast, short Bitcoin investment products attracted $2.8 million in net inflows, indicating that some investors are betting on further downward price movement for the asset.
Ethereum-based products, on the other hand, do Five weeks of outflows have just ended the week before they resumed their negative trend and recorded a net outflow of $28.9 million.
James Butterfill, head of research at CoinShares, explained that this was due to “lackluster” investor interest in the asset. This indicates that while Ethereum briefly stabilized in the eyes of investors, confidence in its performance has increased not fully recoveredresulting in a persistent outflow.
Meanwhile, multi-asset investment products, which offer diversified exposure to a range of cryptocurrencies, bucked the overall trend by attracting net inflows of $29.4 million.
This marked the 16th consecutive week of positive flows for these products, with $431 million flowing into multi-asset funds since June.
Butterfill noted that these products have become popular among investors who prefer a diversified approach and represent approximately 10% of assets under management (AUM) among global crypto fund managers.
Moreover, by region, the largest negative flows were concentrated among funds in the US, Germany and Hong Kong, which lost $209 million, $8.3 million and $7.3 million respectively.
However, these losses were partially offset by net inflows into products in Canada and Switzerland, which saw inflows of $43 million and $34.9 million.
The real reason behind the outflow?
Notably, the change in market sentiment, which resulted in an outflow of millions, is linked to stronger-than-expected economic data. James Butterfill, who is the market reversal on this unexpected economic data, wrote in the report:
Higher-than-expected economic data last week, which reduces the chances of significant interest rate cuts, is likely the reason for the weaker sentiment among investors.
Butterfill has been added wider next to this one economic developmentsstating:
Trading volumes in ETP investment products increased marginally by 15% to $10 this week, while we have seen lower volumes in the broader crypto markets.
Featured image created with DALL-E, Chart from TradingView