Research Summary

This report discusses the recent trends in digital asset fund flows, highlighting a negative sentiment with outflows totaling US$59m last week. Bitcoin experienced the most significant outflows, while short-bitcoin saw its largest single week of inflows since March 2023. Ethereum also saw outflows, while XRP continued to see inflows. Blockchain equities also experienced outflows, marking the fifth consecutive week of such a trend.

Key Takeaways

Negative Sentiment in Digital Asset Investment

  • Continued Outflows: Digital asset investment products saw outflows totaling US$59m last week, marking the fourth consecutive week of outflows. This run of outflows now totals US$294m, representing 0.9% of total assets under management (AuM).
  • Regulatory Concerns: The report suggests that continued worries over regulation of the asset class and recent dollar strength are the most likely reasons for the negative sentiment.
  • Trading Volume Drop: Trading volumes also dropped significantly, by 73% in comparison to the prior week to just US$754m for the week.

Bitcoin and Ethereum Outflows

  • Bitcoin’s Struggle: Bitcoin suffered the most, seeing outflows of US$69m last week, while short-bitcoin saw its largest single week of inflows since March 2023, totalling US$15m.
  • Ethereum’s Decline: Ethereum also suffered, seeing outflows totalling US$4.8m. This brings year-to-date outflows to US$108m, representing 1.6% of AuM.

Blockchain Equities and XRP Inflows

  • Blockchain Equities Outflows: Blockchain equities did not escape the negative sentiment, with US$10.8m outflows, marking the 5th consecutive week of outflows.
  • XRP’s Resilience: Conversely, XRP continued to see inflows totalling US$0.7m last week.

Actionable Insights

  • Monitoring Regulatory Developments: Given the impact of regulatory concerns on digital asset investment, it is crucial to closely monitor developments in this area.
  • Understanding Market Sentiment: The continued outflows from digital asset investment products indicate a negative market sentiment that investors should be aware of.
  • Investigating the Potential of XRP: Despite the overall negative sentiment, XRP has continued to see inflows, suggesting it may be worth investigating further.

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