Contagion events and macroeconomic headwinds gave significantly soured the investor sentiment in digital assets
December marks the second consecutive month that crypto assets under management (AUM) has hovered around levels not seen since December 2020. Despite a flicker of hope in November, it just proved to be an outlier in the larger declining trend — prevalent since last October. Contagion events, severe macroeconomic headwinds, and ongoing FUD (fear, uncertainty, doubt) about digital assets have contributed to this sharp decline in investor sentiment.
According to recent data from CryptoCompare, Crypto AUM is currently down 55.2% from its peak in January 2022 (top chart above). The report compares the average daily volumes and monthly AUM for 2021 and 2022 (lower chart above). Average daily volumes have fallen by 74.1% to $203 million in 2022, compared to $781 million in 2021. Average monthly AUM also saw a similar decline of 39.5% to $31.9 billion, compared to $52.8 billion in 2021.
Going back to the latest monthly performance, the same two metrics continued to fall in December after a slight recovery in November — declining 56.1% to 61.1 million (up to the 20th of December). Aggregate product volume is currently 87.0% lower than its peak in January 2021. Average weekly net outflows from digital asset investment products in December reached their highest level since June, with -$9.5M of outflows.
Originally Published on Medium
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