the latest report from CoinShares, a leading digital asset investment firm, reveals that last week's performance for crypto asset investment products was mixed.
According to the report, the market saw inflows totaling $308 million, marking a continuation of positive trends. However, there were also a series of exits amounting to approximately $1 billion.
Deciphering fund flows
Data shared by CoinShares highlighted substantial outflows, with a single-day outflow of $576 million recorded on December 19. The final two days of the week contributed an additional $1 billion in total outflows, raising concerns among market participants about sustained investor sentiment.
James Butterfill, head of research at CoinShares, explained that these outflows “coincided with a price correction” and “followed the hawkish outlook” presented by the Federal Reserve during its Federal Open Market Committee (FOMC) meeting.
According to Butterfill, the market reacted to the revised “dot plot,” which suggested possible future interest rate increases. Despite these notable outflows, the cumulative impact on total assets under management (AuM) was relatively minor, equivalent to just 0.37% of total AUM.
Butterfill further noted that this event ranks as the 13th largest single-day outflow on record, with the most significant outflow occurring in mid-2022 following a similar FOMC announcement.
While headline numbers suggest caution in the market, bitcoin (btc) showed resilience, managing net inflows of $375 million despite intraweek volatility. Notably, bitcoin shorts saw minimal activity, indicating investors' continued confidence in bitcoin's long-term potential.
Altcoins and multi-asset investment trends
The report further revealed contrasting performances between various altcoins and multi-asset investment products. In particular, outflows from multi-asset funds were quite significant, reaching $121 million, as investors took a more selective and asset-specific approach.
This behavior indicates that investors are becoming more demanding and are targeting assets with stronger fundamentals and growth potential. ethereum (eth) continued to be a standout performer, securing $51 million in inflows over the week.
These entries reaffirm ethereum's position as a key player in the digital asset space, driven by sustained institutional interest and optimism around its technological upgrades.
However, not all major altcoins shared this positive momentum. Butterfill reveals that Solana (SOL) experienced $8.7 million in outflows, which is in stark contrast to ethereum's positive move.
It is worth noting that the discrepancy suggests a divergence in investor sentiment between these two leading assets, potentially influenced by current ecosystem developments and perceived risks.
On the contrary, after eth, XRP emerged as one of the most prominent altcoins, recording inflows of $8.8 million. Similarly, Horizen (ZEN) and Polkadot (DOT) reported inflows of $4.8 million and $1.9 million, respectively, highlighting a preference for specific altcoins despite increased market volatility.
These inflows suggest continued investor confidence in the long-term potential of select blockchain ecosystems, even amid short-term corrections.
Featured image created with DALL-E, TradingView chart
