Digital Asset Funds Reach $50B in Assets Despite Outflows

Digital Asset Funds Reach $50B in Assets Despite Outflows

Digital-asset investment products saw their fifth straight week of outflows, although the magnitude of the outflows is much less than that experienced in May and June, according to a report Monday by CoinShares.

Net outflows across all digital-asset funds totaled $26 million. But following recent gains in the prices of bitcoin, ether and other cryptocurrencies, and total investment product of assets under management (AuM) is now back at $50 billion, the highest level since mid-May.

The market share for ether, the native cryptocurrency of the Ethereum blockchain and the second-biggest overall after bitcoin by market cap, is rising rapidly and now represents 26% of all digital investment products, compared to just 11% at the beginning of 2021.

The price of ether has risen sharply recently, gaining ground in the days leading up to the network’s London hard fork that occurred last Thursday. Ether has risen roughly 16% over the last week, and was trading 4% higher on Monday to near $3,150 at press time.

Although bitcoin has also seen positive price movements in the last few weeks, the cryptocurrency continued to bear the brunt of the outflows, totaling $33 million last week. Ether saw minor inflows totaling $2.8 million last week; ether has not seen the same level of outflows over the last few months as bitcoin.

The report also noted that the number of funds/investment products listed has accelerated recently, with a record of 37 launched so far this year compared to a previous high of 30 launches in 2018.