Digital asset investment products experienced mixed dynamics last week, with US$308 million in total inflows offset by significant outflows during the final two days. The week included the largest single-day outflow of US$576 million on December 19, culminating in US$1 billion outflows for the last two days of the week.
Key Highlights:
Bitcoin Leads Net Inflows Despite Volatility
Bitcoin saw net inflows of US$375 million for the week, despite intra-week outflows.
Short-Bitcoin products remained largely inactive.
Ethereum and Solana Diverge
Ethereum recorded US$51 million in inflows, maintaining investor confidence.
Solana faced US$8.7 million in outflows, reflecting shifting preferences.
Multi-Asset Products See Largest Outflows
Multi-asset investment products suffered the most with US$121 million in outflows, indicating reduced appetite for diversified crypto baskets.
Selective Altcoin Investments
Altcoins like XRP (US$8.8 million), Horizen (US$4.8 million), and Polkadot (US$1.9 million) continued to attract inflows, highlighting a more targeted investment strategy among market participants.
Total Assets Under Management (AuM)
Recent price corrections led to a US$17.7 billion reduction in AuM for digital asset ETPs, attributed to the hawkish tone of the Federal Open Market Committee (FOMC) dot plot.
Despite the alarming outflows, the 0.37% decline in AuM ranks as the 13th largest single-day outflow in history, far below the mid-2022 record of 2.3% AuM outflows.
Market Sentiment:
The data suggests a shift toward more cautious and selective investment strategies, with Bitcoin and Ethereum maintaining dominance. Meanwhile, macroeconomic pressures, such as the FOMC's hawkish stance, continue to influence fund flows and broader market sentiment.
As investors navigate heightened volatility, the focus remains on balancing risk and opportunity in the evolving digital asset landscape.
