Crypto fund outflows continue but negative sentiment cooling off: Report

In the previous week, crypto funds, which are generally preferred by institutional investors, saw net outflows of $207 million, with bitcoin funds witnessing $107 million for the week ending 7 January 2021.

In the recent past, crypto assets have remained depressed in direct response to the Federal Open Market Committee (FOMC) minutes, which revealed the US Federal Reserve’s concerns for rising inflation.

According to CoinShares, the sell-off from funds mark the sharpest outflows since 2018 when viewed proportionally as a percentage of total assets under management (AUM).

“However, on a daily basis, for the first time this year, we saw inflows on Wednesday and Friday, suggesting the bearish sentiment is beginning to abate after recent positive price moves,” the digital asset manager said.

In specific crypto assets, bitcoin-based funds saw net outflows of $55 million during last week, with four out of the last five weeks seeing outflows totalling $317 million. Further, total assets under management (AUM) in bitcoin reached a three-month low of $35 billion mid-week.

Further, ethereum saw outflows totalling $30 million last week (ending 14 January), entering its sixth week of net outflows totalling $230 million. From a relative perspective, ethereum remained the focus of negative sentiment with outflows representing 1.5% of AUM during the period.

On the other hand, solana remained an investor favourite with inflows totalling $5.4 million last week (till 14 January) and has only seen two individual weeks of outflows since August 2021.

In terms of crypto fund providers, the world’s biggest digital asset manager, Grayscale had a total AUM of $38.85 billion, followed by CoinShares at $4.25 billion and 3iQ with an AUM of $2.33 billion.