The month of April saw an average of $79.5 million leave crypto investment products each week, the largest so far in 2022, according to blockchain data firm CryptoCompare. Bitcoin led the decline, with investors pulling an average of $67.3 million each week.
Cryptocurrency exchanges reported lower trading volumes in April as well, marking the sixth straight month of declines. Average daily trading volumes fell 16.3% to $244 million in April. In total, trading volumes are down 71.0% since October 2021 and 83.8% since the all-time high in January 2021 of $1.51 trillion.
Multi-asset cryptocurrency investment products have fared better than their single-asset counterparts, CryptoCompare researchers said. Multi-asset products have posted inflows for the past three months, with average weekly flows hitting $4.23 million so far in April. This compared with $18.9 million in average weekly inflows in February and $7.08 million in March.
Despite an increase in outflows and trading volume decline, digital asset investment products have maintained relatively steady assets under management (AUM), CryptoCompare researchers noted.
“Total aggregate AUM across digital asset investment products fell marginally by 1.34% to $48.1 billion from the end of March to the 27th of April,” analysts wrote in their latest report. “AUM have remained relatively stable so far this year — with March seeing the highest month-end AUM at $48.7 billion.”
Bitcoin and ether experienced price declines of 16.3% and 14.4%, respectively, through April 27. Bitcoin has experienced a slight rally this week as big tech led a rebound in equities, but the largest digital currency has been unable to break $40,000.
“If risk appetite remains strong on Wall Street, bitcoin could continue to rally — if earnings continue to impress — but shortly after Thursday’s mega-cap tech earnings, markets may enter a trading range until next week’s FOMC decision,” Edward Moya, senior market analyst at OANDA, said.
Sentiment also seems to have declined, with Google Trends data showing a decline in searches for bitcoin since the start of the year. The crypto fear and greed index, a popular tool used to measure investors’ attitude, has dipped into the “extreme fear” zone in recent weeks, showing that sellers vastly outweigh buyers.
Bitcoin’s hashrate and mining difficulty have remained steady, near all-time highs, indicating the health of the Bitcoin network remains unaffected by short-term price swings.