Cryptocurrencies see outflows in final week of 2021: CoinShares data

The final week of 2021 saw a third straight week of investment outflows from cryptocurrency funds, even as it capped a year of strong inflows into digital asset investment products, data from digital currency manager CoinShares showed.

Outflows from the sector totalled $32 million last week, taking the tally for the last three weeks to $260 million, although the trend was diminishing following record weekly outflows in mid-December, CoinShares said.

For 2021 as a whole inflows hit $9.3 billion, a 36% jump from 2020 as the launch of bitcoin futures ETFs lured big institutional investors. By comparison, the increase in inflows from 2019 to 2020 was 806%.


Total assets under management ended the year at $62.5 billion in 2021 versus just $2.8 billion at the end of 2019, which "represents a maturing industry," said James Butterfill, investment strategist at CoinShares.

Ethereum's inflows doubled to $1.3 billion in 2021 from $920 million in 2020. Bitcoin, by contrast, saw a 16% increase to $6.3 billion, the lowest growth in inflows relative to other digital asset investment products, according to CoinShares.

Bitcoin, last trading at $46.186.55, has lost a third of its value from its all-time high of $69,000 hit on Nov.10. Ether, the currency for the Ethereum blockchain, last exchanged hands at $3,800.20, down about 20% from its November peak.

Blockchain data provider Glassnode, in its latest research report, said across many on-chain measures, "there is a general lack of activity" in bitcoin despite a modestly bullish undertone in supply dynamics.

It added that bitcoins continue to migrate to increasingly illiquid and dormant wallets, while investor profitability and cyclical metrics paint a more bearish picture.

"With a balance of both bull and bear signals at hand, our expectations into the start of 2022 are likely continued sideways consolidation," Glassnode said.

CoinShares noted the total number of coins in investment product form expanded from nine to 15 in 2021, while 37 investment products were launched versus 24 in 2020, indicative of the demand and popularity of digital assets.

Assets under management at Grayscale and Coinshares, the two largest digital asset managers was $43.23 billion and $4.2 billion, respectively.