Cryptocurrency assets are making a comeback after a drop of nearly $1 trillion in the market cap over the last 4 weeks. According to the latest digital asset fund flows report published by CoinShares, cryptocurrency investment products saw a sharp drop in weekly outflows.
Last week, approximately $21 million worth of investment left crypto products, a number which is 77% lower than $94 million outflows in the first week of June 2021. Cryptocurrency investment products have seen total outflows worth $267 million since mid-May.
Ethereum, the world’s second-largest cryptocurrency, had the largest outflows on record last week. ETH-related investment products saw outflows worth nearly $12.7 million during the period. Additionally, XRP, Cardano and other cryptocurrency assets saw minor outflows.
Why Ethereum Needs Layer 2 Solutions More Than EverGo to article >>
“The outflows in Bitcoin cooled last week, totaling US$10m, significantly less than the previous record week of US$141m. Trading activity in Bitcoin investment products rose by 43% compared to the previous week. XRP saw minor outflows totaling US$2.8m last week following a six-week run of inflows totaling US$21m. Other digital asset investment products saw minor inflows, notably from Cardano (US$1.7m) Stellar (US$1m),” CoinShares mentioned.
Cryptocurrency Market Sentiment
During the last few weeks, the cryptocurrency market has seen a significant drop in its market cap due to the negative sentiment. The impact of the bearish sentiment was evident in the total value of the global digital assets under management. Grayscale, the world’s largest cryptocurrency asset manager, saw a drop of nearly $15 billion in the total value of its digital assets under management. Currently, the US-based company has approximately $35 billion worth of digital assets under management, compared to over $50 billion in May 2021.
Despite the latest negative sentiment, cryptocurrency investment products attracted nearly $6 billion this year. “While sentiment has weakened over the last month, on the whole, investors remain committed given the magnitude of inflows seen this year which represent 13% of AuM or US$5.8bn, nearly matching the US$6.7bn for the whole of 2020,” CoinShares added.