Digital asset funds recorded inflows totaling $433 million during 2022, the lowest level since 2018, when inflows into the crypto industry reached $233 millionaccording to cryptocurrency investment firm CoinShares.
Investor appetite for digital assets does not appear to have been completely affected by the crypto winter, but it did encourage investment in crypto assets in a year marked by falling prices and the collapse of many industry players. James Butterfill, a researcher at CoinShares, noted in the weekly report:
“In a year that saw bitcoin prices plunge 63%, a clear bear market precipitated by irrational exuberance, and an overly aggressive Fed, it’s encouraging to see investors across the board still choosing to invest.”
The biggest gainers in 2022 were Bitcoin (BTC) and multi-asset investment products, with inflows worth $287 million and $209 million, respectively. Inflows last year were significantly lower than in 2020 and 2021, both bull market years, when they reached $9.1 billion and $6.6 billion, respectively.
2022 also saw the rise of short investment products, according to the report, amounting to inflows of $108 million, representing just 1.1% of total Bitcoin under management. “They continue to be a niche asset,” says the researcher.
Canada and Sweden had the largest outflows last year, totaling $436 million and $446 million, respectively.
Among the biggest declines by asset, Ether (ETH) saw $402 million in outflows in 2022. “Ethereum had a tumultuous year that we believe was driven by investor concerns about a successful transition to proof-of-stake and ongoing issues over the timing of unstaking, which we believe will occur in Q2 2023”Butterfill noted.
The report also indicated that mid-year departures in 2018 surpassed those of 2022, with total weekly departures reaching 1.8% of total assets under management. Comparatively, departure feflows in 2022 hit a weekly high of just 0.7%.
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