Cryptocurrency fund outflows hit $47 million last week

Crypto investment products registered outflows for a second consecutive week, the bulk of which came from bitcoin funds, according to data from digital asset manager CoinShares.

The data highlights investors’ cautious sentiment on the cryptocurrency sector as the Russia-Ukraine war continues, it says.

Crypto outflows hit $47 million in the week ended March 18, with bitcoin reaching $33 million in outflows. This compares to $110 million and $65 million, respectively, in the previous week. The last two weeks of BTC outflows now total $101 million but year-to-date flows remain positive at $64 million.

However, other crypto and digital investment products such as Ripple, Polkadot and Solana did show minor inflows for the week, netting $1.1 million, $0.8 million and $0.7 million respectively. The same trend continued with outflows predominantly coming from North American providers, with outflows comprising 98 percent while flows in Europe were broadly flat.

“We believe the recent negative sentiment in North America is due to continued jitters over regulation and geopolitical issues caused by the Ukrainian conflict. Since the conflict began, we have seen trading volumes rise by 160 percent and 150 percentin Ukraine and Russia respectively,” CoinShares said.

Ether, the token used in the Ethereum blockchain, also saw outflows of nearly $17 million last week, its second straight week of outflows, data showed. However, the figure was much less than the previous week which saw outflows of $50 million. Year-to-date investment into ether products still shows outflows at $151 million, representing 1.2 percent of assets under management (AUM).

Ethereum’s market share has suffered in recent months due to Bitcoin’s dominance, and the recent combination of price drop and outflow has seen their AUM fall to $12.9 billion from a record $20 billion. As a result, Ethereum now represents 24 percent of the capital locked in crypto investment products.

Europe’s largest digital asset investment firm, CoinShares made headlines earlier this month after bought additional 20 percent stake in digital bank FlowBank, which is licensed by the Swiss Financial Market Supervisory Authority.

Founded by former LCG CEO, Charles-Henri Sabet, FlowBank promises to smooth the online trading and banking experience with a software platform that allows clients to invest in different asset classes, including cryptocurrencies, from a single account.

Through its strategic investment, CoinShares says it allows its clients to leverage the Swiss banking’s heritage. Flowbank clients also can now invest in CoinShares’ crypto ETPs and other tokenised assets directly from their Flowbank account.