Renewed Interest in Digital Assets as Largest Inflows Occur Since Last July Driven by Bitcoin

After months of diminished interest, interest in digital asset investment products picked up last week, according to Coinshares. The report states that digital asset investments experienced a $117 million inflow last week, the largest since July 2022. At the same time, total assets under management (AuM) rose to $28 billion, up 43% from the November 2022 lows.

Last year was a terrible period for the crypto industry as collapsing valuations were fueled by the demise of erstwhile algorithmic stablecoin TerraUSD, which then initiated a domino effect across the industry. Multiple firms filed for bankruptcy while one of the largest crypto exchanges in the world, FTX, was hit by fraud charges with one person labeling FTX’s operations as old-school embezzlement.

During the first month of 2023, digital assets have steadied a bit, with some cryptocurrencies experiencing a bounce. The report states that Bitcoin has been the largest beneficiary of renewed interest in crypto, which saw $116 million in inflows last week. The report notes there were also minor inflows into short-bitcoin of $4.4m.

Conversely, multi-asset investment products saw outflows for the 9th consecutive week totaling $6.4 million.

Digital asset investment product volumes rose by 17% to $1.3 billion compared to the year-to-date average.

Interestingly, Germany was home to 40% of inflows, followed by Canada, the US, and Switzerland.

Blockchain equities saw inflows totaling $2.4 million, but this is probably due to the overall market increase and affiliated beta.


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