Crypto investment products saw their biggest weekly outflows since February, losing $2 billion as global risk appetite fell.
As CoinShares reported on Monday, cryptocurrency exchange-traded products (ETPs) recorded $2 billion in outflows last week, up nearly 71% from $1.17 billion the previous week. This marks the third straight week of outflows, extending the cumulative outflow streak to $3.2 billion.
CoinShares research director James Butterfill attributed the outflows to monetary policy uncertainty and selling by cryptocurrency whales. As a result, total assets under management (AUM) in crypto ETPs fell to $191 billion, down 27% from the height of $264 billion in October.
The United States accounted for 97% of outflows totaling $1.97 billion, while Germany was a standout with inflows of $13.2 million, bucking the worldwide trend.
Crypto ETPs record $2 billion in outflows across all jurisdictions
While US-based crypto ETPs suffered probably the most losses, this trend was also reflected in lots of other countries.
Switzerland and Sweden recorded outflows of $39.9 million and $21.3 million, respectively. Meanwhile, Hong Kong, Canada and Australia collectively recorded $23.9 million in outflows.
Crypto ETP flows by country (in hundreds of thousands of US dollars). Source: CoinShares
The outflows hit ETPs based on Bitcoin (BTC) and Ether (ETH) the toughest. Bitcoin-based ETPs saw almost $1.4 billion in outflows last week, representing about 2% of their total AUM.
On the opposite hand, Ether ETPs have seen redemptions of nearly $700 million, representing about 4% of total assets.
Smaller crypto ETPs also felt the impact. The ETPs Solana (SOL) and XRP (XRP) recorded outflows of $8.3 million and $15.5 million, respectively.
Investors rotate as sentiment changes
While single-asset ETPs saw large outflows, products that spread their exposure across diversified crypto baskets saw inflows.
According to CoinShares, multi-asset ETPs recorded $69 million in inflows within the last three weeks. The shift suggests investors are in search of lower volatility and broader coverage to weather the uncertainty.
Aside from multi-asset coverage, short Bitcoin funds – ETPs that bet on Bitcoin's decline – saw $18.1 million in inflows over the identical period. This suggests a slight increase in investor hedging activity.
