Digital Asset Products Experienced Largest Outflows Last Week: Report

The outflows of digital asset investment products reached a stunning record-high of $423 million last week amid deepened market dumps, according to the Bitcoin ETF provider ProShares. The amount sharply increased from the prior largest outflow of $198 million by January this year.

Up until the data by June 24th, the net flow Year-To-Date (YTD) for such products sits at -$21 million, and digital assets managed by financial service providers reached roughly $36.2 billion in total.

Largest Weekly Outflows

Proshares’s official blog post indicated that the volume of withdrawing funds from digital asset investment products massively intensified as the market selloff continued in the past two weeks, sending the primary cryptocurrency to slide below $18,000 at one point. The broader impact of the dump was revealed through the data collected last week, Proshares noted.

“The outflows occurred on 17th June but were reflected in last week’s figures due to trade reporting lags, and likely responsible for Bitcoin’s decline to $17,760 that weekend.”

When tracking the amounts of outflows/inflows by asset, Bitcoin saw net outflows totaling $453 Million last week, nearly offsetting all the inflows YTD. The total BTC asset under management (AuM) had thus dipped to $24 billion, the lowest point since the beginning of 2021.

It’s worth mentioning that – with the latest launch of the first-ever Short Bitcoin Futures ETF in the US last week – products that bet the asset to go down in value attracted an inflow of $15 million.

In comparison, Ethereum-related products saw net inflows of $11 million, ending the 11 consecutive weeks of outflows.

Another notable fact is that the first-ever Bitcoin ETF listed in North America – Purpose Bitcoin ETF (BTCC), witnessed an outflow of 24,510 BTC on June 17th, cutting nearly 51% of its AuM. This rendered Canadian exchanges responsible for $487 million in outflows in the past week.

Further Implications

The largest weekly withdrawn volume from digital asset funds shows investors were ditching financial products linked to cryptocurrencies as a pessimistic sentiment continues clouding the crypto market. Though the primary cryptocurrency quickly rebounded after bottoming at roughly $17,500, it has still failed to reclaim the $22,000 line.

Since a fundamental shift in market conditions is not yet in sight, digital asset products are expected to be under pressure as investors tend to embrace a risk-off attitude. Given that the Fed is committed to raising rates to combat rampant inflation, such products may go on seeing high outflows until a structural shift occurs in the macroeconomic environment.