Digital Asset Funds Hit by Record Weekly Outflows of $207M

Bitcoin-focused investment funds saw $107 million in outflows over the seven-day period.

Jan 10, 2022 at 6:31 p.m. UTC
Updated Jan 10, 2022 at 6:39 p.m. UTC

As crypto prices fall, fund investors remain bearish with record weekly outflows from digital asset investment products totaling $207 million in the seven days through Jan. 7.

The spate of redemptions adds to the pressure on the market that began in mid-December, bringing the four-week outflow total to $465 million.

Investment funds focused on bitcoin, the world’s largest cryptocurrency by market cap, saw outflows of $107 million during the seven-day period, according to a report published Monday by CoinShares.

Bitcoin’s outflows were a “direct response” to the minutes of the Federal Reserve’s December meeting published last week that revealed concerns over rising inflation – and the resulting fear among investors that the central bank might move quickly to tighten monetary conditions.

Many investors and analysts say bitcoin has benefited from the ultra-loose monetary policies in place since the coronavirus hit in March 2020.

CoinShares noted that over the last four weeks, crypto investment products have represented up to 25% of total bitcoin trading turnover, highlighting greater investor activity than usual.

Ethereum-focused funds saw outflows of $39 million last week, bringing the last four-week run of outflows to $180 million.

Multi-asset crypto investment fund outflows totaled $37 million, suggesting investors were much less discerning in selling positions; although funds focused on Solana and XRP saw minor inflows, according to the report.

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Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds a Masters degree from New York University in Business and Economics and an undergraduate degree in Political Science from the University of East Anglia. Lyllah holds bitcoin, ethereum, and small amounts of other crypto assets.