Global Crypto AUM in 2022 Shows the Weakest Inflows since 2018

Despite the yearly inflows worth $433 million in 2022, the overall condition of global crypto assets under management (AUM) has turned out to be one of the worst since the last bear market of 2018.

Crypto Fund AUM Flows Touches a Bottom

According to the CoinShares report from Wednesday, the poor performance in 2022 was due to substantial declines in the price of Bitcoin (BTC), and other cryptocurrencies, which lost more than 60%. Changing monetary policies of central banks around the world and a return to interest rate tightening further reduced the attractiveness of risk assets, including stocks and cryptocurrencies.

CoinShares XBT, one of the oldest and still one of the most significant funds in the cryptocurrency market, saw outflows of $446 million. Only 3iQ lost more, with negative net flows of $529 million. However, inflows to CoinShares Physical ($278 million), ProShares ($320 million) and other funds ($637 million) improved the final results.

"Digital assets saw inflows totaling US$433m for the whole of 2022, the lowest since 2018 when there were inflows of only US$233m. Proportionally, the mid-year outflows in early 2018 were far more aggressive than they were in 2022," CoinShares commented.

In 2018, the cryptocurrency asset management industry was taking its first steps, with CoinShares, Grayscale and 21Shares products only available on the market. In 2020, popularity boomed, with inflows at $6.626 billion, reaching a record of $9.112 billion in 2021.

However, the prolonged crypto winter pushed the numbers back to 2018 levels when the market for managed cryptocurrency instruments was significantly smaller.

Bitcoin Gained the Most, While Ethereum Was the Biggest Loser among Crypto

Of the $21.8 billion in AUM reported by CoinShares, BTC is responsible for $13.7 billion. Inflows to BTC funds were the largest in 2022, reaching $287 million. However, this is a highly modest figure compared to 2021 (positive flows of $5.9 billion).

Ethereum (ETH), which total AUM shrank by $402 million to $5.23 billion, performed the worst last year. However, ETH-based products are still the second most popular after BTC. The third place belongs to multi-asset instruments, with a combined AUM of $2.125 billion.

"Bitcoin and multi-asset investment products were the main beneficiaries, seeing inflows totalling US$287m and US$209m, respectively. Ethereum had a tumultuous year which we believe was due to 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," CoinShares added.

Furthermore, the newly presented ‘Short BTC’ products category is responsible for positive crypto fund flows in 2022. Total AUM in 2022 increased by $108 million to $156 million, but the popularity of the short instruments is still low and translates to only 1.1% of the entire crypto AUM.