According to CoinShares weekly report, digital asset investors pulled a combined $250 million out of crypto funds last week. The blockchain analytics company said it is the biggest weekly outflow ever seen.
Meanwhile, assets under management dropped by 9% over the past week to $27 billion, putting a dent in the progress made by crypto funds since the year began. As per CoinShares, the drawdown represents about 1.5% of the total assets invested in all crypto funds.
CoinShares is involved in tracking how money flows in and out of exchange-traded products and mutual funds.
The company says Bitcoin funds were the most affected, accounting for about $236 million of the money pulled out of crypto funds. Ethereum funds came in second, losing more than $12 million over the past week, with altcoin funds like Tron and Litecoin accounting for less than $1 million.
Moreover, weekly inflows into XRP, Polygon, and Solana funds only totaled $3.1 million.
CoinShares Head of Research Notes an Increase in Assets Under Management
James Butterfill, the CoinShares Head of Research, noted that while last week’s total outflow was the highest the firm has ever recorded, it is not the highest when expressed as a percentage of the total assets that have been invested in all crypto funds.
Butterfill explained that in May 2019, a weekly outflow of $50 million represented around 2.5% of the total assets invested in various crypto funds. Therefore, the senior researcher said the total assets under management have increased by 815% since May 2019.
CoinShares Says Ongoing Banking Crisis Triggered the Outflows
Last week was tough for banks that serve clients in the technology and crypto industries.
After several weeks of speculation that Silvergate Bank would not survive for long due to its relationship with FTX, the crypto-friendly bank announced last Wednesday that it would cease operations.
On Thursday, Silicon Valley Bank, which largely serves venture-backed tech companies in the United States, encountered a bank run, forcing the California Department of Financial Protection and Innovation to shut it down. The Federal Deposit Insurance Corporation was later unveiled as the bank’s receiver.
CoinShares says these events caused panic among investors, leading them to withdraw their money from crypto funds.