Crypto investment products see largest outflows on record amid SVB collapse
Cryptocurrency investment products lost 10% of assets under management last week as institutional investors rushed for the exit during the latest episode of market volatility prompted by the Silvergate and Silicon Valley Bank collapses.
Digital asset investment products registered $255 million in outflows for the week ending March 12, marking the fifth consecutive weekly decline and the largest seven-day drop on record, according to CoinShares. The 10% drop in assets under management, or AUM, retraced all the gains in 2023.
As the largest and most influential crypto asset, Bitcoin (BTC) witnessed a $244-million drawdown. Ether (ETH) products lost $11 million in AUM, while multi-asset funds gained $2.2 million.
Year-to-date flows are now negative for Bitcoin, Ether and multi-asset funds. Although short-Bitcoin products registered minor outflows last week, these assets have seen $49 million in total inflows this year.
Investors were on edge last week after Silvergate Bank, a crypto-friendly financial institution, announced that it would unwind its operations and liquidate all remaining assets. Earlier in the month, Silvergate announced it would delay filing the necessary paperwork with the United States Securities and Exchange Commission, prompting widespread fears about its financial position. Like other companies, Silvergate’s problems stemmed from its involvement with the now-failed FTX cryptocurrency exchange.
Related: Crypto Biz: Silvergate shutting down, Alameda suing Grayscale
@federalreserve @USTreasury @FDICgov issue statement on actions to protect the U.S. economy by strengthening public confidence in our banking system, ensuring depositors' savings remain safe: https://t.co/YISeTdFPrO
Adding to last week’s
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