<p class="MsoNormal">Despite the yearly inflows worth $433 million in 2022, the overall condition of global crypto assets under management (AUM) has turned out to be one of the worst since the last bear market of 2018.</p><p>Crypto Fund AUM Flows Touches a Bottom</p><p class="MsoNormal">According to the CoinShares report from Wednesday, the poor performance in 2022 was due to substantial declines in the price of Bitcoin (BTC), and other <a href="https://www.financemagnates.com/terms/c/cryptocurrencies/" target="_blank" id="b091101e-6e02-4b36-aa0e-7c972dfdd6ed_1" class="terms__main-term">cryptocurrencies</a>, which lost more than 60%. Changing monetary policies of central banks around the world and a return to interest rate tightening further reduced the attractiveness of risk assets, including stocks and cryptocurrencies.</p><p class="MsoNormal">CoinShares XBT, one of the oldest and still one of the most significant funds in the cryptocurrency market, saw outflows of $446 million. Only 3iQ lost more, with negative net flows of $529 million. However, inflows to CoinShares Physical ($278 million), ProShares ($320 million) and other funds ($637 million) improved the final results. </p><p class="MsoNormal">"Digital assets saw inflows totaling US$433m for the whole of 2022, the lowest since 2018 when there were inflows of only US$233m. Proportionally, the mid-year outflows in early 2018 were far more aggressive than they were in 2022," CoinShares commented.</p><p class="MsoNormal">In 2018, the cryptocurrency <a href="https://www.financemagnates.com/tag/asset-management/" target="_blank" rel="follow">asset management</a> industry was taking its first steps, with CoinShares, Grayscale and 21Shares products only available on the market. In 2020, popularity boomed, with inflows at $6.626 billion, reaching a record of $9.112 billion in 2021.</p><p class="MsoNormal">However, the <a href="https://www.financemagnates.com/cryptocurrency/crypto-winter-fear-fad-or-opportunity-for-regrowth/" target="_blank" rel="follow">prolonged crypto winter</a> pushed the numbers back to 2018 levels when the market for managed cryptocurrency instruments was significantly smaller.</p><p>Bitcoin Gained the Most, While Ethereum Was the Biggest Loser among Crypto</p><p class="MsoNormal">Of the $21.8 billion in AUM reported by CoinShares, <a href="https://www.financemagnates.com/tag/bitcoin/" target="_blank" rel="follow">BTC</a> is responsible for $13.7 billion. Inflows to <a href="https://www.financemagnates.com/terms/b/bitcoin/" target="_blank" id="261088a9-0f41-4202-a73c-31f75ba6bd93_4" class="terms__secondary-term">BTC</a> funds were the largest in 2022, reaching $287 million. However, this is a highly modest figure compared to 2021 (positive flows of $5.9 billion).</p><p class="MsoNormal">Ethereum (<a href="https://www.financemagnates.com/tag/ethereum/" target="_blank" rel="follow">ETH</a>), which total AUM shrank by $402 million to $5.23 billion, performed the worst last year. However, ETH-based products are still the second most popular after BTC. The third place belongs to multi-asset instruments, with a combined AUM of $2.125 billion.</p><p class="MsoNormal">"Bitcoin and multi-asset investment products were the main beneficiaries, seeing inflows totalling US$287m and US$209m, respectively. Ethereum had a tumultuous year which we believe was due to investor concerns over a successful transition to proof of stake and continued issues over the timing of un-staking, which we believe will occur in Q2 2023," CoinShares added.</p><p class="MsoNormal">Furthermore, the newly presented ‘Short BTC’ products category is responsible for positive crypto fund flows in 2022. Total AUM in 2022 increased by $108 million to $156 million, but the popularity of the short instruments is still low and translates to only 1.1% of the entire crypto AUM.</p>
This article was written by Damian Chmiel at www.financemagnates.com.
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