Digital Asset Investment Products See Record Outflows of $942M After 7-Week Inflow Streak

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Digital asset investment products experienced a record outflow of $942 million from March 16 to 22, marking the end of a seven-week streak of substantial inflows totaling $12.3 billion. 

According to a report from CoinShares, trade turnover amounted to $28 billion, following a record-breaking $43 billion the previous week.

The primary driver behind this negative shift was the outflows from Grayscale’s GBTC (Grayscale Bitcoin Trust), which amounted to $2 billion, surpassing the net inflows into its competitors by $1.1 billion. 

Consequently, the market witnessed a significant withdrawal of $904 million from Bitcoin (BTC)-related investment instruments, a stark contrast to the highest-ever influx of $2.86 billion the previous week.

Total Volume of Crypto AUM Decrease by $10 Billion

As a result of the outflows and the price retracement, the total volume of digital assets under management decreased by $10 billion, settling at $88.2 billion. 

Just a week prior, this metric had surpassed the $100 billion mark. 

Additionally, clients withdrew $3.7 million from structures enabling short positions on BTC, following the previous week’s peak investment of $26 million since the beginning of the year.

“We believe the recent price correction led to hesitancy from investors, leading to much lower inflows into new ETF issuers in the US, which saw US$1.1bn inflows, partially offsetting incumbent Grayscale’s significant US$2bn outflows last week,” CoinShares wrote. 

Digital asset investment products experienced a weekly outflow of $942 million, ending a 7-week streak of inflows up to $12.3 billion.

ETF issuers in the US managed to gather $1.1 billion in inflows, which helped to mitigate the impact of Grayscale’s $2 billion outflows pic.twitter.com/eKSBE1mEv6

— Satoshi Club (@esatoshiclub) March 25, 2024

In Ethereum (ETH) funds, outflows increased from $13.9 million to $34.2 million. 

Similarly, investors withdrew $5.6 million and $3.7 million from instruments based on Solana (SOL) and Cardano (ADA), respectively. 

However, products tied to Polkadot (DOT), Avalanche (AVA), and Litecoin (LTC) experienced inflows of $5 million, $2.9 million, and $2 million, respectively.

It is worth noting that just a week earlier, cryptocurrency investment products had witnessed a substantial inflow of $2.92 billion, following $2.69 billion in the previous reporting period. 

Thus, the total inflow for the year reached an impressive $13.2 billion, surpassing the entire 2021 figure of $10.6 billion.

Bitcoin ETFs See Four Consecutive Days of Outflows

Last Thursday, the Grayscale Bitcoin Trust’s (GBTC) ETF experienced another day of significant outflows, with nearly $359 million exiting the fund.

This followed a week of substantial outflows, with March 18 witnessing the largest single-day outflow of $642 million, according to data from Farside Investors. 

The figures brought the total outflows for GBTC last week to $1.8 billion, marking the fourth consecutive day of net outflows across all 10 Bitcoin ETFs.

Despite the recent slide in Bitcoin prices, investment firm Bernstein has raised its year-end forecast for the cryptocurrency. 

In a research note, Bernstein revised its price target for bitcoin to $90,000, up from the previous projection of $80,000. 

The firm also expressed optimism about cryptocurrency mining stocks, citing Bitcoin’s rise to around $74,000 and the positive response to new spot BTC ETFs.

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