Cryptocurrency investment products and funds showed net outflows for a second straight week, a report from digital asset manager CoinShares showed on Monday, on persistent concerns about regulation and the possible fallout from the Russia-Ukraine conflict.
The sector posted net outflows of US$47 million in the week ended Mar 18, after experiencing outflows of US$110 million the previous week. Previous to the last two weeks, digital asset investment products saw seven straight weeks of inflows.
The outflows came amid ongoing efforts to regulate crypto. President Joe Biden signed an executive order a few weeks ago requiring the government to assess the risks and benefits of creating a central bank digital dollar, as well as other crypto issues.
Bitcoin saw the largest outflow of US$33 million in the latest week, the report showed, following US$70 million outflows previously. Year-to-date flows remained positive, however, at US$63 million.
On Monday, bitcoin was down 0.5 per cent at US$41,047. Since its intra-day low on Feb 24 when Russia invaded Ukraine, bitcoin has gained about 18 per cent.
“Even though bitcoin has retraced a bit after tagging US$42,000 over the weekend, it still managed to close the week well above US$40,000,” said Mikkel Morch, executive director at digital asset hedge fund ARK36.
“Such a retrace seems healthy after a notable move up over the past week and shouldn’t be viewed as a negative reaction to any particular piece of geopolitical or macro news. As long as bitcoin stays above $40,000, there is a good chance of continuation.”
Ethereum-based products had outflows of US$17 million last week, lower than the previous week, which saw outflows of US$50 million. Ethereum continues to suffer from negative investor sentiment, analysts said, with year-to-date outflows of US$151 million, or 1.2 per cent of total assets under management.
In contrast, other altcoins saw inflows last week, such as Ripple, Polkadot, and Solana.
Blockchain-linked equity investment products also posted net inflows of US$17 million last week, up from US$4 million the previous week.
Assets under management at Grayscale and CoinShares, the world’s two largest digital asset managers, fell from their highs to US$37.25 billion and roughly US$3.7 billion, respectively.
