Institutional crypto products record $21M in outflows last week

  • Institutional investors drained out $21 million from the cryptocurrency market last week.
  • Bitcoin experienced outflows of $25 million in the past week.

Digital asset investment products recorded net outflows for the first time in five weeks, according to the latest report by crypto asset management firm CoinShares.

Capital exits from the market

Last week, institutional investors drained out $21 million from the cryptocurrency market, a sharp reversal from the $1.18 billion inflows seen during the week before.

Despite the minor outflows, the digital asset market has seen $1.3 billion in inflows since the beginning of the year.

Source: CoinShares

The outflows were accompanied by a significant surge in trading volumes, totaling $11.8 billion. Coinshares noted that this was seven times more than the average weekly trading volume throughout 2023.

Moreover, the total assets under management (AuM) dropped to $52.2 billion, a decrease of nearly 5% from the previous week.

Grayscale sees massive outflows

A lot of action was emanating from the dozen-odd Bitcoin [BTC] spot ETFs that were cleared for trading in the U.S. earlier in the month.

Newly launched ETFs received over $4.13 billion in inflows, while the “incumbent, higher cost issuers” saw nearly $3 billion in outflows.

Flows by provider

Source: CoinShares

No prizes for guessing, the reference was for the Grayscale Bitcoin Trust, which now stands converted into a spot ETF.

Indeed, the management fees charged by Grayscale were the highest among all ETF issuers, at 1.5%. Most of the approved ETFs have fees of between 0.2% and 0.4%.

Due to this, many investors have redeemed their GBTC shares in favor of Bitcoin and started to profit-take, resulting in selling pressure.

Major crypto assets in pain

Bitcoin, the largest institutional crypto product, experienced outflows of $25 million in the past week. However, on a year-to-date (YTD) basis, the total capital inflows stood at an impressive $1.27 billion.

The king coin has crashed 16% since the ETFs were launched on the 11th of January, owing to selling by GBTC investors.

The other top coins like Ethereum [ETH] and Solana [SOL] also witnessed substantial outflows of $14.5 million and $8.5 million respectively.

These coins, like Bitcoin, have experienced significant market value declines in recent days.

The total market cap of all circulating cryptos shrunk 7.6% over the past week, according to AMBCrypto’s reading of CoinMarketCap data.

market cap 20240116 20240124 Coinmarketcap scaled

Source: CoinMarketCap

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