Institutional Investors Pull Money From Crypto Funds After Seven-Week Streak of Inflows

Breaking down the outflows in terms of asset class, $69.6 million left Bitcoin amid low volumes, followed by $50.6 outflows from Ether. Outflows of other coins including Solana, Ripple, Polkadot were modest at $0.3 million, $0.7 million and $0.9 million respectively.

After seven weeks of inflows from institutional investors, cryptocurrencies and crypto funds saw outflows totaling $110 million last week, underscoring that regulatory concerns continue to be a key issue for digital assets, a investment firm CoinShares said in a synopsis covering digital asset investment flows for the week ended March 11. Of the total outflows, $80 million came from North America which began early last week, suggesting to be in response to US President Joe Biden’s executive order calling for studying the risks and advantages associated with cryptocurrencies.

The executive order, signed on March 9, largely called for measures related to assessing potential financial and economic risks, including challenges related to the illicit use of digital assets, as well as developing good policy recommendations to protect American consumers, investors and businesses. The order also focused on promoting the country’s leadership in digital asset technology. He further called for exploring a US central bank (CBDC) digital currency.

The remaining $30 million in releases were seen in Europe. Although the reasons are unclear, regulatory concerns and geopolitics remain at the forefront of investors‘ concerns for digital assets, CoinShares said.

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Breaking down the outflows in terms of asset class, $69.6 million left Bitcoin amid low volumes, followed by $50.6 outflows from Ether. Outflows of other coins including Solana, Ripple, Polkadot were modest at $0.3m, $0.7m and $0.9m respectively, although Cardano and Litecoin each reported inflows of $0.2 million.

Multi-asset or multi-coin products and blockchain equity investment products also saw inflows amounting to $12 million and $4.1 million last week. In fact, the two were the most popular among investors with inflows representing 3.2% and 6.7% of assets under management (AuM) respectively. Total AuM crypto last week stood at $48,627 million.

Importantly, until the first week ended March 4, investors seemed to have remained committed to crypto products and funds despite geopolitical events. Inflows into digital asset investment products had totaled $127 million during the week, a slight increase from the previous week, “suggesting that investors remained supportive of digital assets,” CoinShares noted. Weekly inflows during the week were led by Bitcoin with $95 million pouring in from investors – the largest weekly inflow since early December 2021.