Research Summary

The report discusses the recent trends in digital asset investment products, focusing on the outflows and inflows of various cryptocurrencies. It highlights the performance of Ethereum and Bitcoin, the impact of different providers, and the regional distribution of flows.

Key Takeaways

Ethereum’s Outflows

  • Ethereum’s Decline: Ethereum experienced its largest outflows since August 2022, totaling US$61m. This brings the last two weeks of outflows to US$119m, making Ethereum the worst-performing asset year-to-date in terms of net flows.

Bitcoin and Multi-Asset Inflows

  • Bitcoin’s Resilience: Despite the overall negative trend, Bitcoin ETPs led the inflows with US$10m. Multi-asset products also saw significant inflows of US$18m.

Provider Impact

  • Grayscale’s Outflows: Grayscale Investments saw significant outflows of US$153m, offsetting minor inflows from most other providers. This contributed to the third consecutive week of outflows totaling US$30m for digital asset investment products.

Regional Distribution of Flows

  • US Inflows: The US saw inflows of US$43m, along with Brazil and Australia, which had inflows of US$7.6m and US$3m respectively. However, Germany, Hong Kong, Canada, and Switzerland experienced outflows.

Altcoins and Blockchain Equities

  • Altcoins’ Performance: A range of altcoins, including Solana and Litecoin, saw inflows. However, blockchain equities have suffered outflows of US$545m this year, representing 19% of AuM.

Actionable Insights

  • Monitor Ethereum’s Performance: Given the significant outflows, it would be prudent to closely watch Ethereum’s performance and market sentiment.
  • Assess Impact of Providers: The role of providers like Grayscale in influencing market trends should be evaluated, as their actions can significantly impact overall flows.
  • Consider Regional Trends: Regional trends in inflows and outflows can provide insights into market sentiment in different geographical areas, which could influence investment strategies.
  • Track Altcoins and Blockchain Equities: Despite the overall negative trend, some altcoins are seeing inflows. Tracking these alongside the performance of blockchain equities could provide a more comprehensive view of the market.

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