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Bitcoin had its best four-day trading streak since February 2021 this week.
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Investors are exiting funds with exposure to digital assets at a record clip, despite a rally in bitcoin and other cryptocurrencies this year.
Last week saw $255 million in net outflows from investment products holding digital assets, the fifth week in a row, according to analysis by Digital Asset Managers and Trading Group.
coinshare
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This represented the largest single week of outflows on record and 1% of total assets under management.
These funds are typically exchange-traded products that provide investors with a way to gain exposure to digital assets such as
Bitcoin
Or
ether
Without actually holding crypto, such as the Grayscale Bitcoin Trust, which trades in over-the-counter markets in the US.
The focus of the selling fell heavily on the largest digital asset, bitcoin, which saw $244 million in fund outflows. But it was not only the bulls that were retreating, the bears were retreating as well. There were notable outflows from short-bitcoin funds that bet against the price.
Crypto-focused asset manager 21Shares has also recently closed five exchange-traded crypto products and delisted another. The move is standard in the exchange-traded products industry, a company spokeswoman said, and is due to an analysis of client demand with funds making up less than 1% of the group’s total assets under management.
21Shares said it continues to see inflows this year, ushering in its second-best January in company history, outperforming 2022 even though crypto prices were extremely low across the board. But data from CoinShares shows that more than $16.3 million flowed out of the 21Shares fund in March, confirming that the recent trend is one of runaway assets from the crypto fund space.
What is notable about withdrawals from crypto funds is that it counters the price action in the spot markets for bitcoin and other digital assets.
Bitcoin had its best four-day performance this week since February 2021, and is up nearly 60% so far this year. This has been the same throughout the crypto landscape, where the total market capitalization of digital assets has grown from less than $800 billion to more than $1.1 trillion since the beginning of 2022.
Write to Jack Denton at [email protected]