According to the Digital Asset Fund Flows report, there was a significant drop in assets under management (AUM) for institutional funds, reaching $38 billion, the lowest level since July 2021. Investment products in the digital asset space saw outflows of $141 million in the week ending on May 20.
The report indicated that Bitcoin (BTC) saw the primary outflows, with a decline of $154 million during the week. This occurred amid a volatile trading week where the price of BTC fluctuated between $28,600 and $31,430.
Despite the outflows, the month-to-date BTC flow for May remained positive at $187.1 million, with a year-to-date inflow of $307 million.
On a positive note, multi-asset investment products saw inflows of $9.7 million for the week, bringing the yearly total inflow to $185 million, which accounts for 5.3% of the total AUM.
Increased volatility was cited as a reason for the rise in inflows into multi-asset investment products, which are considered safer during volatile periods compared to single-line products. These products have experienced only two weeks of outflows so far in 2020.
Altcoins such as Cardano and Polkadot led the inflows, with $1 million each, followed by XRP with $700,000, and Solana (SOL) with $500,000.
Meanwhile, Ethereum (ETH) experienced the worst performance this year, with $44 million in outflows in May, bringing its year-to-date total to $239 million.
Strengthening Dollar Impacting Crypto Market Sentiment
The reduced interest in digital asset investment products coincides with a strengthening dollar, which has been a significant macro factor influencing asset prices in recent months, according to Delphi Digital, a cryptocurrency market intelligence firm.
Delphi Digital highlighted the Dollar Index (DXY) rising from 95 at the beginning of 2022 to 102 on May 23, marking a 6.8% year-to-date increase. This rapid surge led to a breakout from a seven-year range for the DXY.
“This DXY strength has been a consistent drag on risk asset performances over this same time period,”
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