The crypto market suffers: the FTX bust already led to a $23 million investments outflow

Since last week, negative sentiment in the crypto market persists after the FTX collapse and all that it uncovered. CoinShares head of research James Butterfill shares the numbers: what exactly that event turned out to be.

Outflows prevail almost everywhere

Outflows in digital asset investment products totaled $23 million. The last time something like this was seen was three months ago. Only BTC short products were in a slight surplus. The strongest negative sentiment was in the U.S., Sweden, and Canada, where there was either an outflow of funds from long-investment products or an inflow into short-term products.

Long BTC had outflows of $10.1 million, while Short BTC had inflows of $9.2 million. However, these outflows are relatively small when you consider AUM (Assets under management (AUM) is the total market value of the investments that a person or entity handles on behalf of investors.) for Long-BTC products ($13,704 million) or its total inflows since the beginning of the year ($322 million).

All other products, including Ethereum, showed insignificant outflows. Solana’s was close to 0 (inflows of $0.1 million).  Large inflows into short ETH products were replaced this week by outflows of $15.2 million.

Last week’s outflow from blockchain stocks was $13 million. Outflows continued in altcoins. XRP, Polygon, and Tezos were the main focus, totaling $0.5 million, $0.3 million, and $0.2 million respectively.

What to expect from the future?

After the FTX and Alameda crash, and the subsequent BlockFi collapse, there are concerns about where the contagion may spread. All eyes are now on Silvergate Bank and Digital Currency Group (DCG), the parent company of Grayscale and Genesis. Genesis previously reported that it had $175 million trapped on FTX. And DCG also owes Genesis $575 million, which is due in May 2023. Silvergate had mixed results in the third quarter of this year, with cryptocurrency-to-fiat transfers down $50 billion from the same period last year, although profits for the same period rose 84% to $43 million.

Despite the string of shocking events, a Coinbase survey of institutional investors found that digital assets are the second most attractive asset for alpha income after U.S. investment-grade corporations and real estate. 58% of investors expect to increase their investments over the next three years. Of those who have already invested, 71% have increased their investments in the past 12 months. Most investors (59%) use or plan to use a buy-and-hold approach.