Digital Asset Funds Inflows Fell to $433M in 2022, From $9.1B in 2021: Report
A recent report by CoinShares showed that digital asset funds saw $433 million in inflows in 2022, the lowest in four years. However, given that 2022 was one of the most challenging years for crypto, Bitcoin and multi-asset investment products continued to attract investor interest, seeing inflows of $287 million and $209 million, respectively.
Bitcoin and Multi-Asset Investment Products Saw Inflows in 2022, Ethereum Struggled
Digital asset inflows totaled $433 million in 2022, according to a new fund flows report by CoinShares. This is the lowest annual figure since 2018, when digital assets saw inflows of just $233 million.
Mid-year outflows in 2018 were more substantial compared to 2022. Total weekly outflows at a certain point in 2018 rose to 1.8% of total assets under management (AUM), while 2022 outflows reached a weekly record of just 0.7% of all AUM. Nevertheless, inflows were substantially weaker compared to 2021 and 2020, when inflows stood at $9.1 billion and $6.6 billion, respectively.
Bitcoin and multi-asset investment products saw the most robust demand, recording inflows of $287 million and $209 million, respectively. The same cannot be said for Ethereum, which had a turbulent 2022 due to investor concerns over the Merge and other issues. The second-biggest crypto token saw strong outflows of $402 million in 2022, a sharp reversal compared to the previous two years.
Short-investment products saw inflows of $108 million during the year, though this remains a niche access class, representing just 1.1% of all Bitcoin AUM. Still, it marks a notable increase from 2021 and 2020, when short Bitcoin investment products recorded inflows of just $33 and $2 million, respectively.
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Investors Retained Interest in Crypto Despite an Extremely Difficult Year
The report suggests that investors remained interested in digital assets during a tumultuous year. Investors continued to increase their positions in Bitcoin and multi-asset investment products despite a 63% drop in the world’s biggest cryptocurrency.
Challenging macroeconomic conditions such as 40-year high inflation and substantial interest rate hikes by the Federal Reserve pushed investors away from risk assets while driving the US dollar to the highest level in 2 decades.
This, coupled with a string of headwinds, caused a massive sell-off in the global crypto market, which lost $1.5 trillion in value over the past year. The collapse of the FTX crypto exchange in November accelerated the sell-off as the contagion spread to numerous other crypto projects.
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