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Crypto Funds Hit New Low Since July 2021

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Digital asset fund outflows reached $141 million last week, ending on May 20th. This caused the total AUM by Institutional funds down to $38 billion. This is the lowest level seen since last July. 

During its $154 million decline, Bitcoin (BTC) was the main focus of the outflows for the week. This, due to a choppy week with fluctuating BTC prices between $28,600 and $31,430.

However, despite this downward movement, BTC month to date is still showing positively, while the yearly figure remains at $307 million. 

$9.7 million worth of inflows was recorded last week bringing the yearly total inflow to $185 million in the multi asset category of investment products. This represents 5.3% of the total AUM. 

The upticked volatility of the markets may be a potential source for the increase in inflows into the multi-asset investment products, which is often seen as a safer option compared to single investment products. 

Cardano (ADA) and Polkadot (DOT) have led the altcoin inflows, increasing by $1 million each. Two other coins, Ripple (XRP) and Solana (SOL) were responsible for another increased set of inflows, $700,000 and $500,000 respectively. 

Outflows in Ethereum (ETH) have been the worst performing of all, reaching a staggering $44 million for the month of May. 

Dollar Strengthening: Impact on Market Sentiment

Amid the backdrop of a strengthening dollar, the interest in digital asset investment products has declined. A crypto intelligence firm, Delphi Digital states that this is “one of the most important macro factors driving asset prices over the last six months.”

The dollar has risen from 95 to 102 since the start of the year, 2022, and has marked the fastest year over year change from DXY in recent years. “This DXY strength has been a consistent drag to risk asset performances over this same time period,” said Delphi Digital.

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