World Crypto AUM in 2022 Reveals the Weakest Inflows since 2018
“Assets Under Management in Cryptocurrency Funds Hits a Bottom”
Global crypto assets under management (AUM) have turned out to be in one of the worst situations since the last bear market in 2018, despite annual inflows exceeding $433 million in 2022. According to a research published by CoinShares on Wednesday, the dismal performance in 2022 was caused by the fact that Bitcoin (BTC) and other cryptocurrencies lost more than 60% of their value. The attractiveness of risk assets, such as equities and cryptocurrencies, has decreased as a result of the shifting financial policies of central banks throughout the world and the return to interest rate tightening. The cryptocurrency market’s earliest and still one of its most prominent funds, CoinShares XBT, saw $446 million in redemptions last year. Only 3iQ lost more, with net negative flows of $529 million. The total results improved, however, due to investments into CoinShares Physical ($278 million), ProShares ($320 million), and other funds ($637 million).
“”Digital assets witnessed inflows totaling US$433m for the entire of 2022, the lowest since 2018 when there were inflows of only US$233m. “”CoinShares noted that the proportion of investors selling in the first half of 2018 compared to the same time in 2022 was substantially higher. In 2018, CoinShares, Grayscale, and 21Shares were the only cryptocurrency asset management products on the market. The recognition industry experienced a surge in 2020, with inflows of $6.626 billion, eventually topping out at $9.112 billion in 2021. However, the prolonged crypto winter has brought the figures back to 2018 lows, when there was a far smaller market for managed bitcoin products.
CoinShares has $21.8 billion in AUM, with Bitcoin making up $13.7 billion of that total. In 2022, investors poured a record $287 million into Bitcoin (BTC) ETFs. When compared to 2021 (positive flows of $5.9 billion), this is a minuscule sum. The poorest year-over-year performance was posted by Ethereum (ETH), whose total AUM fell by $402 million to $5.23 billion. Even Nevertheless, despite BTC’s dominance, ETH-based items continue to sell well. Multi-asset products come in at No. 3 with a total AUM of $2.125 billion.
“”Bitcoin and multi-asset investment products were the biggest benefactors, receiving inflows of US$287m and US$209m, respectively. We believe investor concerns over a successful transition to proof of stake and ongoing uncertainties over the timing of un-staking contributed to Ethereum’s turbulent year, which we expect will occur in Q2 2023,”” CoinShares noted.
Positive crypto fund flows in 2022 can also be attributed to the debut of the ‘Short BTC’ products category. In 2022, overall AUM grew from $108 million to $156 million, although interest in short products remained modest, accounting for only 1.1% of all crypto AUM.
