Key Insights:
- Digital asset investments saw $240M in outflows, yet AUM remained stable despite market volatility.
- The US and Germany experienced the largest outflows, while Canada saw inflows amid market uncertainty.
- Derivatives trading volumes surged sharply, signaling increased hedging and speculative activity.
Last week, digital asset investment products experienced notable outflows totaling $240 million, primarily driven by market uncertainty surrounding recent US trade tariff news. This news raised concerns over potential threats to global economic growth, affecting investor sentiment.
Despite these outflows, the total assets under management (AUM) in digital asset investment products remained remarkably steady at $132.6 billion, reflecting a 0.8% weekly increase. This resilience stands out, especially in comparison to broader market trends, such as an 8.5% decline in MSCI World equities during the same period.
Bitcoin, Ethereum, and Others
The recent outflows were primarily from Bitcoin, which saw $207 million in outflows for the week. Despite these losses, Bitcoin has still experienced a total of $1.3 billion in inflows year-to-date (YTD).
Ethereum also saw significant outflows, amounting to $37.7 million for the week and $51.5 million MTD. Other assets like XRP experienced inflows, with $4.5 million added for the week, though this was contrasted by a $2.1 million outflow MTD.
Multi-asset funds, however, defied the overall trend, registering a modest inflow of $1.4 million for the week and $0.7 million for the MTD. On the other hand, Solana and Sui faced outflows, with Solana losing $1.8 million for the week and Sui seeing $4.7 million in outflows during the same period. Despite these outflows, Sui has experienced a strong $53 million in YTD inflows, suggesting some investor interest in newer cryptos.
Flow Analysis by Key Providers
Outflows were particularly pronounced among several major digital asset investment providers. iShares ETFs in the USA saw $56 million in outflows for the week and $71 million for the month-to-date (MTD). This suggests a broader reaction to the prevailing market concerns.
Grayscale Investments LLC was hit hardest, recording a $95 million outflow, which likely reflects growing investor caution amid global economic volatility.
Meanwhile, Fidelity Wise Origin Bitcoin F was one of the few exceptions, with a small inflow of $10 million for the week. This small inflow stood in contrast to the generally negative market sentiment. ARK 21 Shares/USA experienced a more modest outflow of $20 million, but the firm still showed a relatively positive year-to-date flow of $146 million.
Smaller players, including Bitwise Funds Trust, ProShares ETFs/USA, and CoinShares XBT Provider AB, also faced outflows, although these were less severe compared to Grayscale or iShares.
Regional flows further illustrated global investor sentiment during this period. The US saw the largest outflows, amounting to $210 million, followed by Germany with $17.7 million.
In contrast, Canadian investors showed more resilience, with a $4.8 million inflow. This region-specific variation highlights the differing outlooks on digital assets in response to market conditions.
Bitcoin Trading Activity Soared
Amid the broader market volatility, Bitcoin derivatives trading activity surged sharply. The total volume in the derivatives space spiked by 162.7%, reaching $165.46 billion. Notably, options trading volume rose by 255.8%, totaling $4.92 billion, which indicates a growing interest in hedging and speculative strategies.
While overall futures open interest dropped by 5.35%, indicating reduced market conviction, options open interest rose 4.8%, reinforcing the shift toward hedged strategies.
Liquidations surged, with $467.6 million cleared in 24 hours—$400.98 million of which came from long positions. Shorter timeframes also showed pressure: $155.18 million liquidated in 4 hours and $282.41 million over 12 hours, underscoring increased risk aversion.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
