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Buying Opportunity: Crypto Institutional Investors Pump $862 Million Into The Market

Crypto investment products are up again in terms of inflows, giving the crypto industry a much-needed breather. Recent market dynamics have seen Bitcoin leading the surge of inflows into crypto investment products, signaling a possible resumption of bullish sentiment.

James Butterfill, head of research at Coinshares, reported this inflow in a social media post. The statistics indicate that crypto investment products received inflows of $862 million over the timeframe spanning from March 23 to March 29 to reverse the record net outflows of $942 million set in the prior week. Unsurprisingly, most of the inflow went into Bitcoin, hinting at a potential buying opportunity for investors still waiting to get in on the asset during this bull run.

Institutional Investors Pump $862 Million Into Crypto Market

James Butterfill termed the inflow registered last week as a “recovery for ETFs.” This is rightly so, as these US-based Spot Bitcoin ETFs gave investors a scare in the prior week with lackluster inflow, hinting at the possibility that the bull run could be coming to an end. This led to crypto investment products bleeding for the first time after seven consecutive weeks of inflows. 

However, it would seem the sentiment regarding Spot Bitcoin ETFs is now back to a very bullish outlook. As a result, Bitcoin registered $865 million in inflows to bring its year-to-date inflow to $12.83 billion. On the other hand, Ethereum and multi-asset products registered $18.9 million and $2.6 million in outflows, respectively, to offset some of the inflows registered by Bitcoin. 

Inflows of $6.1 million, $0.2 million, $0.3 million, $1.1 million, and $2.4 million were recorded for Solana, Litecoin, XRP, and Polkadot, respectively. Polkadot also registered an inflow of $2.4 million. Short Bitcoin products, on the other hand, witnessed outflows of $2 million. 

Crypto inflows

Buying Opportunity For Bitcoin?

Bitcoin’s price surge for the past few months has largely been due to action surrounding Spot Bitcoin ETFs. Interestingly, last week’s inflow activity saw Bitcoin breaking into the $70,000 price territory multiple times last week. This bullish momentum wasn’t sustained, allowing the bears to create a resistance at around $71,000.

Nevertheless, the inflow indicates something bullish might be brewing behind the scenes. Fundamentals surrounding the crypto point to a bullish price action throughout April, particularly as the next halving approaches.

Bitcoin went through bearish price action over the weekend, correcting by almost 7% from $71,285. At the time of writing, Bitcoin has broken below a support at $68,500 and is now trading at $66,510. According to Santiment, the price dip has given crypto traders a sense of buying opportunity with calls of “buy and bullish” spiking across social media.

Crypto total market cap chart from Tradingview.com

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Crypto Institutional Investors Are Frontrunning Retail As Inflows Reach Record Highs

Crypto investment products continue to shine in the middle of a strong bullish market sentiment. New data has shown institutional investors and traders are now going full speed on crypto investment products, allowing inflows to attain a new inflow record. According to CoinShares, a digital asset investment firm, digital investment products registered a record weekly inflow of $2.7 billion last week, pushing the year-to-date inflow near a new record.

Crypto Institutional Investors Continue To Aim Higher

The crypto market has attracted its fair share of rich visionaries and institutional traders over the years, with most just dabbling in and out. Recent market factors, however, have opened the industry and made it palatable to big traders. As a result, trading volume from this cohort of investors has ballooned to new highs.

In its latest weekly report, CoinShares noted that investment products based on cryptocurrencies reached a new milestone of $2.7 billion inflow last week, bringing the run to six consecutive weeks of inflows. Hence, the total inflow year-to-date is now at $10.3 billion, just $300 million shy of the $10.6 billion inflows recorded in 2021.

To put this into perspective, we’re less than three months into 2024, and inflows are already on par with those recorded throughout the bullish cycle in 2021.  At the same time, trading volume reached a new record of $43 billion for the week, smashing the $30 billion record set in the previous week.

Unsurprisingly, most of this activity can be credited to Bitcoin, with the majority of inflow going into the cryptocurrency. According to CoinShares, Bitcoin remained the focus of investors to attract $2.6 billion in inflows last week, representing 96% of the total inflow. This comes despite a $1.65 billion outflow from Grayscale’s Spot Bitcoin ETF.

Speaking of Spot Bitcoin ETFs, there’s no denying the fact that these investment vehicles have been the primary catalyst for Bitcoin’s recent growth. This has allowed Bitcoin to break over various price resistance to reach new all-time highs. Last week, the 10 ETFs in the US ended the week at a net inflow of $2.238 billion, with BlackRock and Fidelity leading the charge. Despite recent price rises, short Bitcoin products also recorded $11 million in inflows last week.

On the other hand, Ethereum investment products witnessed an outflow of $2.1 million last week to reverse $84.7 million inflows recorded in the prior week. This is despite Ethereum crossing over the $4,000 price level for the first time in two years. The reverse case is for Solana, which witnessed $24 million inflows after an outflow of $11.9 million in the previous week. 

Polkadot, Fantom, Chainlink, and Uniswap also saw inflows of $2.7 million, $2 million, $2 million, and $1.6 million, respectively.

Crypto total market cap chart from Tradingview.com

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The Bulls Are Back: Crypto Institutional Inflows Balloon To 2021 Levels

Crypto investment products have experienced another week of inflows, bringing the run to 10 consecutive weeks. According to CoinShares’ latest report on digital asset investment funds, inflows into crypto products totaled $176 million last week, bringing the total inflow in 10 weeks to $1.76 billion. The timing is not a coincidence, as most cryptocurrencies turned green again last week in terms of price action.

Total Crypto Inflows Hit $1.76 Billion In 10 Weeks

After a lackluster action for most of the year and some weeks of net outflows, the most recent data shows smart money investors are betting big on crypto again. Investments in digital asset funds have been on the rise for the past two months, ignited by the crypto market bull run which started in the middle of October. As a result, the inflows have ballooned every week, breaking levels not seen since 2021’s crypto market bull run. 

Digital asset investment funds ended November with an inflow of $176 million, although down from the $346 million registered in the week before. Most of the money last week went into Bitcoin, with the cryptocurrency seeing $133 million in inflows. 

Bitcoin remains the most popular digital asset for institutions, and interest has really piqued with the applications of spot Bitcoin ETFs in the US waiting for approval from regulators. As a result, the crypto has strengthened since October, breaking various price levels and resistances, the latest being the $42,000 price level.

The sentiment has also flowed into the altcoin market. Ethereum saw inflows of $31 million last week, bringing its 5-week inflow run to a total of $134 million. Multi-asset investment products that provide exposure to a basket of crypto assets saw $2.3 million in new investment. 

Crypto total market cap chart from Tradingview.com (Institutional investors)

Solana and XRP saw inflows of $4.3 million and $0.5 million respectively. On the other hand, Litecoin saw outflows of $0.2 million, and Short Bitcoin products saw $3.6 million inflows after three consecutive weeks of outflows. 

Most of the inflows came in from Canada, Germany, and the US, which saw inflows of $79 million, $57 million, and $54 million respectively. Australia and Sweden also saw outflows of $0.5 million and $0.2 million respectively. However, the overall trend shows institutions are still bullish on crypto in the long run.

It’s exciting to see such numbers again, as they are reminiscent of past bullish sentiment in the crypto industry. According to CoinShares, this run of inflows is now the largest since October 2021, which saw the launch of the futures-based ETF in the US. 

Assets under management have also risen by 107% this year and are now at $46.2 billion, but still below the $86.6 billion seen in 2021. However, this record is ready to be overtaken in the coming year, as the latest data provides further evidence that institutional interest in the crypto market will continue for a while.