Institutional Crypto Products Saw Record Outflows of $423 Million Last Week

Key Insights:

• Institutional crypto products saw record outflows totalling $423 million last week.
• Canadian investors represented nearly all of the outflows.
• Bitcoin also experienced a net withdrawal of $453 million in investments.

According to CoinShares’ weekly Digital Asset Fund Flows report, digital asset investment products saw record outflows totalling $423 million last week.

Interestingly, Canadian investors represented nearly all of the outflows for crypto investment products, with the figure being partially offset by $70 million worth of inflows from five other countries.

Demographics

U.S-based investors accounted for more than half of the inflows with $41 million last week.

Meanwhile, Germany and Switzerland accounted for inflows totalling $11 million and $10.4 million, respectively. In contrast, Brazilians and Australians contributed with minor inflows of $1.6 million and $1.4 million.

Overall, the outflows amounted to $422.8 million, which represents the largest weekly shedding by institutional investors since CoinShares records began.

For perspective, this figure was $198 million in January this year – more than double last week’s outflows.

While inflows into an asset can be considered bullish, outflow is defined as an amount of coin withdrawal from exchange wallets where investors move out of a specific crypto and into other assets, be it cash, different cryptocurrencies, or otherwise.

Offloading of BTC Products

The report also highlighted how investment products offering exposure to Bitcoin (BTC) saw $453 million worth of outflows – wiping off all the inflows made over the past six months and leaving Bitcoin assets under management (AUM) at $24.5 billion – the lowest point since the beginning of 2021. Solana (SOL) products saw outflows of $100,000.

The offloading of BTC products last week has nearly pushed the year-to-date (YTD) flows into the negative.

In fact, over 108,200 Bitcoin has been withdrawn across crypto exchanges since June 14. The world’s largest cryptocurrency is currently trading at around $21,000, which is 69% lower than its all-time high of $69,044 set in November 2021.

Crypto prices have plummeted amid bearishness following the U.S. Federal Reserve’s reversal of pandemic-era stimulus measures. However, it is worth noting that BTC and altcoins generated nominal gains after the Fed raised the benchmark interest rate by 0.75% on June 15 – the largest hike in 28 years.

What’s more, the report found that investment products offering exposure to shorting the price of BTC generated the largest inflows last week at $15.3 million. This can be attributed to ProShares launching the first-ever short Bitcoin exchange-traded fund (ETF) in the U.S. on June 22.

The Bitcoin Short Strategy ETF (BITI) allows investors to take short positions on the market without holding BTC themselves and on launch day, it traded a measly 183,300 shares. The next day’s trading volume jumped nearly four times to 886,200 shares, worth about $36.2 million.

Finally, Ethereum (ETH) investment products posted inflows of $10.9 million last week but year-to-date Ether products have seen outflows totalling $448.3 million, which makes them the least favoured investment choice amongst institutional investors this year.

In January this year,  investors pulled an average of $61 million from digital asset vehicles each week.