XRP Investment Products Shine as SOL Multi-Asset Products Register Outflows

Over the past week cryptocurrency investment products saw $308 million in inflows, despite the recent crypto market correction that saw the price of Bitcoin (BTC) plunge to $93.300 at the time of writing.

The products that attracted investors the most were those offering exposure to Bitcoin (BTC), with $375 million flowing into these products, and an additional $51.3 million flowing to Ethereum-focused products.

Notably the XRP token stood out among its peers, with $8.8 million invested into these funds in a single week amid the launch of Ripple’s RLUSD stablecoin. Year-to-date, XRP investment products have seen $430 million inflows, which represent more than half of their $835 million in total assets.

According to CoinShares’ Digital Asset Fund Flows report, in contrast to these funds were those offering exposure to multiple cryptocurrencies, as these products saw $121.4 million outflows, dropping their year-to-date flows to $282 million.

Similarly, Solana-focused investment products saw $8.7 million outflows, moving their month-to-date outflows to $22 million, and reducing their year-to-date inflows to a mere $80 million, a significant figure given Solana’s 70% price rise year-to-date.

The inflows seen over the past week, CoinShares notes in its report, mask the “largest single day of outflows on the 19 December” which totalled $576 million. In the final two days of the week, as cryptocurrency prices crashed, outflows reached $1 billion.

Crypto Investment Products’ AUM Drop by Nearly $18 Billion

The report further details that the cryptocurrency market drop, which started after the Federal Reserve cut interest rates by 25 basis points and its Chair Jerome Powell revealed a more hawkish stance and hinted at a slowdown in the rate of interest rate cuts next year.

Powell’s comments affected risk assets across both the cryptocurrency space and traditional financial markets, with the S&P 500 index losing around 3.5% of its value before recovering.

Per CoinShares’ report, assets under management for cryptocurrency investment products dropped by a whopping $17.7 billion as a result of this drawdown, equivalent to 0.37% of the total assets under management.

In terms of assets under management, the largest single-day outflow for these products occurred in mid-2022, when $540 million were withdrawn after the Federal Open Markets Committee (FOMC) raises interest rates. The figure was equivalent to 2.3% of assets under management at the time.