Digital asset investment products see third straight week of outflows in July: Report
- Investment product trading turnover remained low at $1.7 billion last week, shows CoinShares data
Investors across the globe pulled out $28 million from digital assets last week in the third straight week of such outflows, digital asset manager CoinShares said, indicating the negative sentiment over the asset class despite constructive comments from key industry players.
Major cryptocurrency supporters including Tesla chief executive Elon Musk, Twitter founder Jack Dorsey and ARK Invest’s CEO Cathie Wood reiterated support for bitcoin last week, amid widespread sell-off in digital currencies. Still, bitcoin saw the heaviest outflows, totalling $24 million, the largest outflows since mid-June. Net flows year-to-date remain positive, with inflows of $4.1 billion, but they are off their peak of $4.7 billion seen in early May.
Ethereum saw outflows of $7.3 million; however, according to CoinShares, flows were mixed among digital asset investment product providers with no discernible regional trend.
Multi-asset investment products (investment products comprising bitcoin, ether and other digital assets) bucked the trend for yet another week, clocking inflows of $3.1 million. “Multi-asset is the only set of investment products where there have been inflows every week this year representing 18% of assets under management,” a CoinShares report said.
The data also showed that investment product trading turnover remained low at $1.7 billion last week, representing just 22% of the high in volumes seen in May. This decline is mirrored in overall bitcoin volumes which were 32% over the same period.
“Given the industry is quite new, and that the valuation is not high enough, the market is reacting to news from individual industry players and influencers. However, this won’t be the case after a few years down the line as we have seen the stability being continuously established over time. We are now at this critical juncture where we need the technology to be present but want it safe in the eyes of regulators,” Sathvik Vishwanath, co-founder and CEO, Unocoin said in a statement.
US-based Grayscale Investments LLC remained the biggest digital asset manager with assets under management (AUM) at $28.5 billion, followed by CoinShares at $3.157 billion.
In another report, blockchain data provider Glassnode noted that on-chain activity has remained somewhat bearish and continues to be quiet. On-chain transactions refer to transactions that are recorded and verified on the blockchain.
“Perhaps utilization of the bitcoin network is lagging prices in this case. Ideally, renewed volatility and constructive price action sparks back demand for block-space. If not, it may suggest a more cautious framework is necessary in the weeks ahead,” said Glassnode in a report.
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