Digital asset funds experienced the weakest year since the prior bear cycle in 2018, with inflows of just $433M in 2022 dropping 95% Y/Y, according to a Wednesday blog post by CoinShares.
The huge drawdown in inflows is not surprising. Last year featured exceptional price depreciation, with bitcoin (BTC-USD) plummeting around 65%, a super hawkish Federal Reserve in its battle against inflation, increased economic uncertainty and recession fears. On top of that, the crypto industry got stung by a series of scams, blockchain attacks and bankruptcies that put investors on edge.
Inflows last year were also significantly lower than 2020's $6.6B and 2019's $715M.
Also, many traders that wanted to bet against crypto took to short-investment products, which saw inflows of $108M.
Ethereum (ETH-USD), the world's largest altcoin by market cap, saw the most outflows among other major crypto assets, at $402M. The outsized outflows came in the wake of "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," the blog read.
Here's the SA writers who called the bitcoin crash correctly.