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Investors withdrew $20 billion from bitcoin funds in November

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Key facts:
  • A CryptoCompare report showed a 14.5 percent drop in fund assets.

  • Fund investments in bitcoin fell by $13.4 billion in November.

In November, the various companies that manage cryptocurrency funds collectively recorded a $19.6 billion, or 14.5 percent, drop in their assets under management (AUM), according to a report by CryptoCompare. With this outflow, assets under management reached their lowest value since December 2020, the report said.

This significant drop in assets under custody reflects market sentiment of fear over the FTX collapse, as well as expectations of possible further declines, the study notes. In November, the value of assets under management fell 55 percent from the beginning of the year..

The chart below shows the monthly volume of assets under management by the funds, which exceeded $50 billion in March and declined sharply over the year.

Monthly volume of assets under management in funds.
Assets under management in cryptocurrency funds, as of February 2022. Source: CryptoCompare.

Bitcoin lost appeal to investors in November

The report also provides data on assets under management in bitcoin. “In November, AUM in bitcoin fell 15.9 percent to $13.4 billion, the largest decline since June 2022,” CryptoCompare notes.

Bitcoin’s market share also declined slightly by 0.96 percent to 68.9 percent of total AUM. In comparison, bitcoin accounted for 74.3 percent of all assets under management last June..

The chart below shows assets under management by month since December 2021, specifying different cryptocurrencies, such as BTC, ETH, and others. Investments in baskets of cryptocurrencies are also included.

Assets under management by cryptocurrency per month, as of December 2021.
Assets under management by cryptocurrency, over the past 12 months. Source: CryptoCompare.

As can be seen, bitcoin and ETH are the majority in terms of assets under management. For example, in the case of Grayscale, GBTC and ETHE are the two largest investment funds in BTC and ETH, respectively.

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Another consequence of the FTX liquidity crisis has been increased capital outflows from cryptocurrency funds after a quiet October, the research notes. The weekly average of capital outflows was $11.9 million, according to the study.

This is consistent with the CoinShares report published on November 28, which reported an outflow of of funds in bitcoin and other cryptocurrencies of $23 million in the week of Nov. 21-27.

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