From CoinShares Research Blog by James Butterfill

Digital Assets Endure US$1bn Outflows Amid Hawkish FOMC, Yet Overall Inflows Persist

Digital asset investment products saw a continuation of inflows last week totalling US$308m, although this masks the largest single day of outflows on the 19th December totalling US$576m, with total outflows in the final 2 days of last week at US$1bn.

Recent price corrections resulted in a US$17.7bn reduction in total assets under management (AuM) for Digital Asset ETPs, likely in response to the hawkish dot plot released by the FOMC on Wednesday. While these outflows may sound alarming, they comprise just 0.37% of total AuM, ranking as the 13th largest single-day outflow on record. The largest single-day outflow took place in mid-2022, when the FOMC interest rate hike prompted US$540m outflows (2.3% of AuM.)

Bitcoin, despite the intra-week outflows, still saw net inflows for the week totalling US$375m. with little activity from short-bitcoin investors.

The most dramatic flows were from multi-asset investment products, which saw US$121m of outflows last week. Although many altcoins continued to see inflows, such as XRP (US$8.8m), Horizen (US$4.8m) and Polkadot (US$1.9m), suggesting investors are preferring to take a more selective approach.

Ethereum saw a further US$51m inflows at the expense of Solana which saw US$8.7m outflows.