Cryptocurrency exchange traded products (ETPs) saw a significant pullback last week, with outflows totaling $240 million. This trend was driven by recent U.S. trade tariff developments that are causing concerns about economic growth, according to a research report by CoinShares on April 7.
Despite the outflows, the total assets under management (AUM) in the digital asset sector showed resilience, increasing by 0.8% over the week to reach $132.6 billion. This contrasted with the 8.5% decline in the MSCI World equities index during the same period.
Investor sentiment shifted notably, with most of the outflows concentrated in Bitcoin investment products, which saw $207 million exiting. Year-to-date inflows for Bitcoin products still stood at $1.3 billion. Ethereum also experienced significant outflows of $37.7 million, while altcoins like Solana and Sui saw outflows of $1.8 million and $4.7 million, respectively.
On the other hand, more niche tokens like Ton Coin attracted inflows of $1.1 million, indicating selective investor interest in specific digital assets. Geographically, the negative sentiment was widespread, with the United States and Germany leading the outflows at $210 million and $17.7 million, respectively.
In contrast, Canadian investors viewed the market downturn as a buying opportunity, contributing inflows of $4.8 million. This divergence in regional perspectives highlights the varying views on recent economic developments and their impact on digital asset investments.
Interestingly, blockchain equities recorded inflows for the second consecutive week, totaling $8 million. This suggests that some investors see the recent price weaknesses in blockchain-related stocks as favorable entry points, demonstrating a nuanced approach to investment within the digital asset ecosystem.
The recent U.S. trade tariff news has prompted a reevaluation of risk exposure in digital asset investment products. While there was a cautious reaction leading to substantial outflows, the overall stability in AUM indicates sustained confidence in the long-term viability of digital assets.
Overall, investors are rethinking their strategies amid economic pressures, but the digital asset sector continues to show resilience in the face of market volatility. The evolving landscape of cryptocurrency investments underscores the importance of staying informed and adapting to changing market conditions.