Crypto Funds Suffer 2nd Straight Week of Outflows; Investors Rotate Toward Altcoins
Investors exited digital asset funds amid the crypto sell-off, and have diversified into altcoin products.
Updated Mar 6, 2023 at 3:17 p.m. UTC
![Weekly digital asset fund flows](https://www.coindesk.com/resizer/_WV4lp0opdm4qcPd1hJ4YrvlDKU=/567x412/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/MRKGBLVC75BE3BBNEHOZTVN6QY.png)
Digital-asset investment funds suffered outflows for a second straight week, a sign profit taking is offsetting fresh money amid the crypto sell-off.
Investors pulled a net $97 million from cryptocurrency-related investment funds during the week ending May 21, or 0.2% of total assets under management, according to a Monday report by CoinShares.
- Outflows “represent a net change in sentiment following increasing regulatory scrutiny and concerns over bitcoin’s environmental credentials,” according to CoinShares.
- “Last week saw lower outflows for bitcoin with outflows of $111 million versus $115 million the previous week.”
- Investors continued to diversify into altcoin investment products last week totaling $27 million in inflows, led by cardano.
- The rotation into altcoins could “represent investors actively choosing proof-of-stake coins based on environmental considerations.”
- On May 12, Tesla announced that it was suspending bitcoin payments over environmental concerns, accelerating a move down in bitcoin prices. The cryptocurrency is down about 34% month to date.
- Ethereum products saw minor outflows of $12.6 million last week following a long run of record-breaking inflows.
![Chart shows net new assets and slowing assets under management across digital investment products.](https://www.coindesk.com/resizer/VnAGAF-AgwdNUMov7hwdmqdv5_4=/560x397/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/MAEOEP7QDFFCZEN4HO3CCLMTQE.png)