US regulatory crackdown leads to $32M digital asset outflows: CoinShares
Institutional investors may have gotten the jitters on crypto in the wake of the regulatory crackdown in the United States, with digital asset investment products seeing the largest weekly outflow of 2023.
On Feb. 20, institutional crypto fund manager CoinShares reported that digital asset investment products saw outflows totaling $32 million last week, the largest outflow of the year.
This week in Fund Flows, by our Head of Research @jbutterfill : Digital assets see US$32m in outflows, but rising prices push AuM to highest since August 2022.Read the full report - https://t.co/EIXblrOBcLGet a comprehensive view of last week’s crypto flows (1/5) pic.twitter.com/WvJk15WAWs
The outflow comes in the wake of a massive crackdown on the digital asset industry in the U.S. which has targeted everything from staking services to stablecoins to crypto custody as the Securities and Exchange Commission ramps up what industry analysts have dubbed its war on crypto.
Outflows hit $62 million midway through last week but slowed by the end of it as sentiment improved, added CoinShares analyst James Butterfill.
The majority of those outflows, or 78%, were from Bitcoin (BTC) related investment products and there was an inflow of $3.7 million to Bitcoin short funds. The firm blamed the regulatory crackdown for the increased outflows.
However, negative sentiment from institutional investors was not mirrored by the broader markets which saw a 10% gain for the period. This pushed total assets under management for institutional products to $30 million, the highest level since August 2022, noted Butterfill.
There were also outflows for Ethereum (ETH) and mixed-asset funds but blockchain equities bucked the trend with inflows totaling $9.6 million for
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