Despite $433 million in annual inflows, reports state that 2022 was one of the worst years for global crypto assets under management (AUM) since the last bear market in 2018. According to a CoinShares report released on Wednesday, the dismal performance in 2022 was caused by significant drops in the price of Bitcoin (BTC) and other cryptocurrencies, which fell by more than 60%. 

The declining appeal of risk assets, such as stocks and cryptocurrencies, has been exacerbated by the shifting monetary policies of central banks worldwide and a tightening return to interest rates. 

In 2022, the weekly peak of outflows was only 0.7% of the total AuM, which was not as severe as the 1.7% in 2018. However, the total inflows were much lower than those of $9.1 billion and $6.6 billion reported in 2021 and 2020, respectively.

Bitcoin ($287m), “multi-asset” ($209m), Short Bitcoin ($108m), and Solana ($121m) had the most significant influx of capital. There was a net outflow of $402 million from products based on Ethereum, making it the digital asset with the most negative performance in terms of outflows.

The report added that the turbulent year for Ethereum was caused by investor anxiety over a smooth transition to proof of stake and ongoing issues with the projected date of un-staking in the second quarter of 2023.

United States remains major trading hub

Furthermore, the report added that the largest withdrawals of digital asset funds occurred in Sweden (-$446 million) and Canada (-$436 million), while the largest inflows were in Switzerland (+$577 million) and the United States (+$376 million).

According to CoinShares, the United States is still the primary trading venue for digital asset funds, with a total of $1.57 AUM, which accounts for 72% of the global total.