Latest a report CoinShares, a leading digital asset investment company, revealed that last week’s performance of its crypto asset investment products was mixed.
According to the report, the market witnessed inflows totaling $308 million, representing a continuation of positive trends. However, there were also a series of outflows amounting to around $1 billion.
Deciphering fund flows
Data shared by CoinShares highlighted significant outflows, with December 19 seeing a single-day outflow of $576 million. The last two days of the week contributed an additional $1 billion to total outflows, raising concerns among market participants about continued investor sentiment.
James Butterville, head of research at CoinShares, explained that these outflows “coincided with a price correction” and “followed the hawkish outlook” provided by the Federal Reserve during the Federal Open Market Committee (FOMC) meeting.
According to Butterfill, the market has reacted to a revised “dot chart,” which indicates potential interest rate increases in the future. Despite these notable outflows, the cumulative impact on total assets under management has been relatively minor, amounting to only 0.37% of total assets under management.
Butterville also noted that the event ranks as the 13th largest single-day outflow on record, with the most significant outflow occurring in mid-2022 following a similar announcement from the FOMC.
While the headline numbers point to caution in the market, Bitcoin (BTC) showed resilience, managing net inflows of $375 million despite volatility during the week. It is worth noting that short Bitcoin products saw little activity, indicating continued investor confidence in Bitcoin’s long-term potential.
Altcoins and multi-asset investment trends
The report also revealed the contrasting performance between various altcoins and multi-asset investment products. In particular, outflows from multi-asset funds were very large at $121 million, as investors took a more selective and asset-specific approach.
Such behavior indicates that investors are becoming more selective and targeting assets with more stable fundamentals and growth potential. Ethereum (ETH) remained a standout performer, receiving $51 million in inflows over the course of the week.
These inflows reaffirm Ethereum’s position as a major player in the digital asset space, driven by continued institutional interest and optimism surrounding its technology upgrades.
However, not all major altcoins shared this positive momentum. Butterfill reveals that Solana (SOL) saw $8.7 million in outflows, which is in sharp contrast to Ethereum’s positive movement.
It is worth noting that this discrepancy indicates a difference in investor sentiment between these two major assets, likely influenced by ongoing developments in the ecosystem and perceived risks.
In contrast, after ETH, XRP emerged as one of the premium altcoins, recording inflows worth $8.8 million. Likewise, Horizen (ZEN) and Polkadot (DOT) reported inflows of $4.8 million and $1.9 million respectively, highlighting the preference for specific altcoins despite broader market volatility.
These flows indicate continued investor confidence in the long-term potential of select blockchain ecosystems, even amid short-term corrections.
Featured image created with DALL-E, chart from TradingView