The aftermath of FTX’s collapse has soured crypto investor sentiment with “record” inflows into short-investment products last week, said CoinShares.
FTX crisis leads to record inflows into short-investment products
Institutional Outflows From Bitcoin Paints Bearish Picture For Crypto Market
Institutional investors have been quite neutral on both bitcoin and the crypto market at large for a while now. This has translated into a mix of inflows and outflows into various digital assets, alternating with each passing week even through the bear market. However, current net flow records show that these large investors are beginning to find their chosen position in the market and it is in the camp of the bears.
Bitcoin Sees Outflows
Bitcoin had been recording minor inflows in the last month-and-a-half which had been good for the digital asset despite not having much of an impact. This has now changed completely as the figures for last week show $13 million in outflows for the digital asset.
This bearish sentiment has been more prominent in the short bitcoin that is now on to its third consecutive week of outflows. The $7.1 million brought the total outflows from short bitcoin to $28 million. These outflows show that large investors are pulling out of the market more instead of taking one side over the other, an overall bearish development.
The digital asset outflows for the week came out to $15.6 million during this time. Furthermore, it was a bearish start to the month of November with $19 million in outflows already. So even though November has been a historically bullish month for the crypto market, investors do not seem to believe this will be the case this time around.
Crypto market suffers general bearishness | Source: Crypto Total Market cap on TradingView.com
Reason For Bearishness
While it has not had as much of a profound effect as expected, the result of the FOMC meeting has been largely influencing the behaviors of investors in the market. The fourth consecutive interest rate hike by 75 bps showed that the Fed was nowhere close to backing down on its hawkish stance against the high inflation rates.
As expected, such high interest rates will have an effect on markets such as crypto, greatly limiting their ability to grow, especially during a bear market. It is also no surprise that the United States led the outflows for the week since the Fed decision has the most impact in the region.
Nevertheless, there were still some inflows from across the point. Both Switzerland and Germany saw inflows of $6.8 million and $4 million respectively, most of which were focused on altcoins. Ethereum finally put an end to its outflow trends with inflows of $2.7 million. XRP followed this trend with inflows of $1.1 million, marking its third week of inflows.
Since that time, the crypto market has taken a turn so it is expected that there might be a change in institutional investor sentiment in the coming week. However, the general crypto market sentiment continues to skew largely into the negative, which means no significant inflows should be expected.
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Institutional Investors Remain Bullish As Short Bitcoin Sees Outflows
Institutional investors have swung between bearish and bullish when it comes to bitcoin for the better part of this year. Each time though, the direction of their money always shows how they are currently looking at the crypto market. The same is the case for the past week, where numbers have pointed towards more bullishness for these large investors.
Short Bitcoin Outflows Continue
Since the market began its recovery trend, short bitcoin has been seeing outflows. The ETF had been quite popular and successful when it was launched earlier this year, giving the perfect timing to being launched when the crypto winter was just beginning. However, outflow figures are showing that institutional investors are gradually abandoning their bearish stance on the digital asset.
The prior week had come with outflows for short bitcoin to the tune of $15 million, which represented 10% of total assets under management (AuM) at the time. Last week marked a second consecutive week of outflows for the fund with another $2.4 million, bringing its total outflows since September to $20 million. This figure now represents 15% of AuM for the fund from mid-September until the present.
BTC price fails to hold $20,500 | Source: BTCUSD on TradingView.com
As expected, the opposite was the case with long bitcoin that saw inflows of $14 million for last week. The prior week had also seen the digital asset record $4.6 million in inflows. Even though these inflows remain minor, it goes to prove institutional investors remain very bullish. It has now marked its seventh consecutive week of inflows.
Behind The Bullishness
The general sentiment behind bitcoin has been more bullish than not and the Twitter deal with Elon Musk has been a major driver behind this. The billionaire is a staunch supporter of cryptocurrencies, which has led many to believe that he would end up promoting the use of bitcoin and other digital assets on the platform.
On the back of the deal completion, the value of cryptocurrencies has skyrocketed during this time. Bitcoin had been able to retest the $21,000 for the first time in more than a month. Naturally, other assets in the space have followed this trend.
However, there is a slight decline in positive sentiment due to the wait for the decision from the Fed. Another interest rate hike would no doubt be detrimental to the crypto market, causing investors to take defensive positions as the market awaits the Fed’s statement.
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New hashprice-based derivatives instrument gives Bitcoin miners another way to hedge
Better luck next time? Luxor’s OTC Bitcoin mining derivatives could offer miners “a much needed tool to hedge their mining operations.”
Here’s What Bitcoin Institutional Inflows Says About The Month Of July
The price of bitcoin has had an eventful start to the month of August, and it doesn’t look like it will be stopping anytime soon. Mostly, it is the residual effects of what happened in the markets during the month of July, where the price of bitcoin had actually broken above $24,000. In the same vein, the institutional inflows have a lot to say about bitcoin, especially when it comes to how big money is looking at the digital asset.
Bitcoin Inflows Grow Strong
Bitcoin inflows for the month of July had actually maintained a steady uptrend. The digital asset was able to receive another $85 million worth of inflows for the last week of July, mostly for long bitcoin. At the same time, short bitcoin continued to decline with $2.6 million in outflows for the week.
Others in the space also enjoyed inflows, and by the end, it came out to be the strongest month of inflows so far for the year 2022. This is because there had been a recorded $474 million, which had almost made up for the outflows that had rocked cryptocurrencies in the month of June with a total of $481 million.
BTC trading at $22,900 | Source: BTCUSD on TradingView.com
This now makes it the 5th consecutive week of inflows for all digital investment products, most of which had come from North America. Canada had brought in $67 million while the United States recorded a much lower $15 million.
Across the pond, countries such as Brazil and Sweden also contributed to the inflows, albeit to a lesser degree. Others who saw minor inflows include Solana and Polkadot, with $1.5 million and $0.4 million, respectively.
What This Says For The Market
The reversal of the outflow trend in the month of July follows the recovery in investor sentiment over the last couple of weeks. It shows that retail investors are not the only ones feeling more bullish about the market, but institutional investors were beginning to feel the impact of the recovery too.
Most prominent has been bitcoin which has enjoyed the most of these inflows. And although Ethereum failed to make a marked recovery from institutional investors, it, too, had been seeing growing confidence in the market lately.
Essentially, the turn in the tide has come despite low trading activity in the space. Net flows from exchanges continue to point towards an accumulation trend that mirrors this bullish sentiment. Since investors are bringing this bullish trend from the month of July into August, it is quite possible that there is more recovery to come in the market.
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Bullish Sentiment Spills Over To Institutional Investors As Ethereum Inflows Balloons
Institutional investors had been showing bearish sentiment towards Ethereum for the longest time. The second-largest cryptocurrency by market cap, which had initially caught their attention, was not doing as well as expected, and the outflows that followed were massive. However, it looks like sentiment among these large investors is beginning to turn positive as Ethereum has begun to record inflows.
Ethereum Inflows Balloons
Over the last several weeks, Ethereum inflows have been ramping up. Although they were nowhere near the volumes that had been recorded during the bull market, it had put a stop to more than 2 months of consecutive outflows for the digital asset.
Last week would prove to be no different, given that Ethereum’s inflows had come out to $8 million, a low volume, but it was inflows nonetheless. But the most important inflows were recorded in the week prior when the digital asset had initially been recorded to have seen inflows of $2.5 million.
Related Reading | More Than 57,000 Traders Liquidated As Bitcoin Declines Below $22,000
Corrected numbers which had emerged this week had shown that not only was this number too low, it was off by more than $100 million. When the corrected data was published this week, it showed that inflows into ETH had reached $120 million in that single-week period, meaning that it was the largest single-week inflow in one year.
It is a testament to the changing sentiment among institutional investors when it comes to the altcoin. With the anticipated Merge approaching quickly, the bullish sentiment has washed over both small and large investors alike, prompting more investment into the digital asset.
A Week Of Inflows
Ethereum was fortunately not the only cryptocurrency to mark another week of inflows. The bullish sentiment had extended to almost every sphere of the crypto market, and the investors had reacted accordingly. So from bitcoin to digital asset investment products, the inflows continued.
Related Reading | Ethereum Weekly Exchange Net Flow Points To Growing Accumulation Trend
Bitcoin had seen either week of inflows, with $16 million recorded for last week. Just like Ethereum, the numbers for bitcoin for the prior week had been incorrect, and corrected data showed a much higher inflow rate for the prior week with $206 million in total. The inflow trend was not limited to long bitcoin alone, though as short bitcoin continued its streak with $0.6 million in inflows.
Digital asset investment products would prove to be the big winners for the week with inflows of $27 million. The total asset under management has not been pushed back up to $30 billion with last week’s inflows. Europe also accounted for the majority of inflows as Switzerland alone recorded $16 million for last week. The USA and Germany would see lesser inflows of $9 million and $5 million.
What this data shows is how investors are looking toward the market with the recent recovery. However, given the recent decline in prices, it remains unsure whether the inflows will continue for the new week.
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Institutional Investors Remain Bearish As Short Bitcoin Sees Record Inflows
Bearish sentiment toward Bitcoin among institutional investors has been gaining ground in recent months. This was propelled even further by the crash that rocked the digital asset back in mid-June. Since then, bitcoin has struggled to keep its head above the $20,000 level, and as it continues to fail, bearish sentiment has grown rampant. This is evident in the short bitcoin inflows that were recorded for last week.
Record Numbers For Short Bitcoin
The latest CoinShares report has shown that institutional investors are only investing in bitcoin for the short term, and what’s more, they believe that the digital asset is set to decline more. It shows that inflows into the short bitcoin ETFs had hit their highest point since its inception with $51 million for the previous week.
Related Reading | Mounting Support For Bitcoin At $19,000 As Market Ushers In A New Week
The ProShares short BTC ETF is the latest in line for these types, and while it had seen significant inflows for the prior week, it was chalked up to the fact that the ETF had just launched. However, last week has put into perspective how institutional investors are viewing bitcoin going forward.
To put this in perspective, while inflows for short bitcoin had come out to $51 million for the 7-day period, bitcoin had only recorded $0.6 million in inflows. The digital asset had narrowly missed recording another week of outflows with one of the lowest inflows ever recorded.
BTC falls to $19,500 | Source: BTCUSD on TradingView.com
Compared to the prior week’s inflows of $15 million, the inflow into short bitcoin had grown a total of 240%. It is one of the most obvious indicators that institutional investors do not expect the price of bitcoin to recover anytime soon.
Institutional Investors On Altcoins
The bearish sentiment on bitcoin on the part of these institutional investors has been relegated to bitcoin only. The CoinShares report shows that altcoins had seen continued inflows. Ethereum which had suffered almost three months of outflows had recorded its second consecutive week of inflows with a total of $5 million.
Other altcoins such as Solana, Polkadot, and Cardano, all competitors for Ethereum, also recorded inflows. Their figures came out to $1 million, $0.7 million, and $0.6 million respectively for last week. This indicates that institutional investors are forecasting a better future for these assets compared to bitcoin.
Related Reading | Active Ethereum Addresses Touch 2020 Levels, Will Price Follow?
The Multi-asset investment products were not left out. A total of $4.4 million flowed into them and it has continued to hold its ground even through the bear market, with only 2 weeks of inflows recorded in the space of six months.
One noteworthy thing is that the bearish sentiment seems to be more prominent in institutional investors in the United States. Other regions had recorded better inflow numbers into long investment products which had come out to $20 million for the week.
The report notes that this may be due to the fact that short bitcoin ETFs had become available in the US for the first time. Hence, investors are rushing to take advantage of the new fund.
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Decline In Ethereum Futures On CME Suggests Institutional Investors Are Still Bearish
Institutional investors have been bearish toward Ethereum for a while now. There have been outflows rocking the digital asset until it ended its 11-week streak with inflows for last week. However, this does not mean that positive sentiment had returned entirely to the cryptocurrency once more. The numbers on the CME show that institutional investors remain wary and even bearish toward the second-largest cryptocurrency in the market.
Ethereum Falls Into The Negative
The Ether futures on the CME have been trading on a negative basis lately, which basically means they are trading below spot. This has caused the Ether Futures on the come to decline to the lowest they have ever been since inception.
The Ether-denominated open interest on the CME had previously claimed a new all-time high back in April. But since then, has continued to decline, with more drops recorded over the last weekend. This has spelled a bad streak for the month of June.
Related Reading | Outflows Rock Bitcoin As Institutional Investors Pull The Plug, More Downside Coming?
As the month draws to a close, the three-month Ether basis has now decoupled from bitcoin and has been trading below spot, which had been recorded on June 23rd. Hence marking the first time that the Ether basis would ever decline so low.
ETH futures on CME in decline | Source: Arcane Research
Asset managers have now moved to a predominantly bearish stand following this. It has been recorded that they have been net short on Ethereum since mid-June when it stood at $37 million. This number has since dropped but only slightly to be resting at the $32 million that was recorded last week. The Ether futures basis is now sitting at a -2.33% while bitcoin remains at 0.63%.
ETH Struggles To Hold $1,000
The bearish sentiment towards Ethereum has not been relegated to just institutional investors alone. The spot markets are also feeling the heat as sell-offs have resumed. In light of this, the digital asset has had a hard time holding the $1,000 level.
ETH struggles to hold above $1,000 | Source: ETHUSD on TradingView.com
This level is significant for Ethereum due to the fact that there is support mounting here. However, it is a very critical technical level given that if the price were to decline below this point, resistance would quickly build up around it. Any support below $1,000 is incredibly weak, so a dip from here would likely see the price touch $800 before there is any recovery.
Related Reading | Ethereum Plugs 11-Week Bleed, why $1,500 May Be On The Horizon
Ethereum is now trading firmly below its 20-day moving average which has wiped out all hopes for a bullish recovery in the short term. Additionally, as the 3AC liquidation comes into focus, the implications for digital assets such as ETH remain very negative.
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Outflows Rock Bitcoin As Institutional Investors Pull The Plug, More Downside Coming?
Outflows have been the order of the day since the price of cryptocurrencies such as Bitcoin had begun to crash. The same sentiment had spread through individual as well as institutional investors, leading to massive sell-offs in the space. Despite the price of bitcoin recovering in recent times, it seems that the sellers are not done just yet as outflows had ramped up over the last week.
$453 Million Leaves Bitcoin
Bitcoin had been seeing a reversal trend with inflows coming in for the prior week. However, this has only been short-lived as outflows have continued to rock the digital asset. For the last week, CoinShares reports that bitcoin had led the outflow trend and the net outflows had come out to $453 million for the digital asset. It is one of the largest outflows ever recorded for the digital asset and has wiped out the majority of inflows on a year-to-date basis.
Related Reading | Bitcoin May Not Reclaim All-Time High For Another Two Years, Binance CEO
This comes as bitcoin’s price had continued to fluctuate around $20,000 over the last week. It was expected that the low prices would trigger more inflows into the market for the past week but the opposite has been the case. The total assets under management (AuM) for bitcoin now sits at $24.5 billion, the lowest it has been in more than a year.
BTC recovres above $21,000 | Source: BTCUSD on TradingView.com
Its short-bitcoin counterpart had gone a different path this week where inflows had been the order of the day. The $15 million that flowed into it is said to be a result of the first US-based short investment product which launched last week. Given that the older short-bitcoin investment products had recorded outflows for the same time frame, all fingers point towards the launch.
Ethereum also saw inflows, a first in three months. It came out to a total of $11 million flowing into the altcoin after suffering 11 weeks of outflows.
North American Outflows Grow Worse
The outflows have been localized to one specific region and that is the North American corner of the market. CoinShares notes that the majority of the outflows had come from Canadian exchanges. Specifically, one provider. Most of the outflows had been seen on 17th June but did not show up until last week. It shows that these sell-offs had been a trigger for bitcoin’s decline to $17,700.
Related Reading | Crypto Liquidations Settle As Bitcoin Recovers Above $21,000
Digital asset investment product outflows were just as large with $423 million flowing out of the market, a new record for the space. However, given the lag that led to the trades from the Canadian exchanges updating late, it is important to know that these outflows were not from last week alone. When these outflows are removed and marked to their correct time frames, it shows that inflows of $70 million had been recorded by other providers.
The last time record outflows were seen was at the start of the year when $198 million had left the market in a single week in January. The outflows recorded for last week have surpassed this by more than 100%, although the ratio to the assets under management remains low compared to the bear market outflows of 2018 where outflows had reached as high as 1.6% of total AuM.
Featured image from MARCA, chart from TradingView.com
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Low Bitcoin Prices Trigger Inflows, But Investor Sentiment Remains Weak
Institutional investors’ reactions to the bitcoin price crash have been quite similar to that of retail investors. After weeks of outflows, the tides have begun to change, largely credited to the low prices that offer a chance to get into the digital asset before a recovery. The past week saw inflows for the digital asset, although other assets tell a different story.
Bitcoin Sentiment Recovers
Bitcoin sentiment had declined far into the negative following the price crash of last week. With the digital asset reaching as low as $17,600, it triggered massive sell-offs across the space. However, not everyone in the space had seen the declining prices as a signal to sell. For some, it presented a unique opportunity to get some ‘cheap’ bitcoins which is what is seen across the institutional investors.
Bitcoin’s outflows had been ramping up over the previous week due to the low momentum in the market. This had turned for the better last week when the outflow trend had been canceled and money began to flow into the cryptocurrency.
Related Reading | Bitcoin Miner Liquidations Threaten Bitcoin’s Recovery
The leading cryptocurrency had benefitted the most from this turn in investor sentiment as its inflows came out to $28 million for the week. Now, this is not exactly an impressive figure when it comes to inflows for bitcoin. However, it is important due to not only the market sentiment but the fact outflows had characterized the market for the previous week. It brings the month-to-date inflows for bitcoin to a total of $46 million.
Nevertheless, the short bitcoin had gone the other day. This asset saw record outflows for the past week. With a total of $5.8 million, short bitcoin embodied the negative sentiment felt throughout the market recently, coming after reaching a new all-time high of $64 million just at the beginning of the week.
BTC begins another decline trend | Source: BTCUSD on TradingView.com
Outflows Rock The Rest
It would seem that bitcoin would be one of the solitary beneficiaries of the inflow trend for the past week. For the rest of the market, the sell-off trend had taken a stronghold and digital asset investment had seen inflows of $39 million. This brings the total assets under management to $36 billion. It is now sitting at its lowest point in more than a year, accounting for a 59% decline in the last six months alone. However, net flows remain positive at $403 million on a year-to-date basis.
Related Reading | By The Numbers: The Worst Bitcoin Bear Markets Ever
Ethereum is yet to be free from its bearish hold as outflows remain the order of the date. For the last week alone, Ethereum outflows had reached $70 million. The second-largest cryptocurrency by market cap has now seen 11 straight weeks of outflows with no reprieve in sight. Its year-to-date outflows now sit at a massive $459 million.
Multi-asset investment products and Solana would, however, go the way of bitcoin for last week. Both these asset classes maintain inflow trends stubbornly. Inflows for multi-asset investment products came out to $9 million while Solana saw inflows of $0.7 million, presumably from investors who are moving out of competitor, Ethereum, due to fears that the Merge would not be taking place according to schedule.
The crypto market has lost more than $100 billion since last week. It is currently sitting at $892.6 billion at the time of this writing.
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Bitcoin Crash Sends Institutional Investors Running For The Hills
Small and retail investors are not the only ones getting hit hard by the Bitcoin crash. Institutional investors are also feeling the heat of the market crash. This has sent the institutional investors running as inflows had halted for the last week. Outflows from crypto and blockchain-related investments grew steadily over the course of the weeks, totaling more than $100. million.
Institutional Investors Stay Away
The institutional outflows for last week have been concerning for crypto investors but in no way surprising. With the emergence of the ‘crypto winter’, it has signaled that the bear market is in full force. Thus, investors are forced to react accordingly.
Outflows had climbed throughout last week and had come out to a total of $102 million. It culminates a long-running outflow trend that had mostly stayed in the altcoins. However, this time around, bitcoin has been drawn into this trend.
Related Reading | Bitcoin Drops To 18-Months Lows, Has The Market Seen The Worst Of It?
The pioneer cryptocurrency saw outflows totaling $57 million last week alone. This was the case across the short-bitcoin investment products which had also recorded outflows. For bitcoin, these weekly outflows bring its month-to-date outflows to $91 million. Short-bitcoin investment products are now only seeing $55 million of total assets under management (AuM) compared to $27 billion for its longer-term bitcoin investment products.
Total market cap drops below $1 trillion | Source: Crypto Total Market Cap on TradingView.com
Outflows All Across Crypto
Ethereum had been recording consistent weeks of outflows over the past several months and this past week was no different. The second-largest cryptocurrency by market cap saw $41 million in outflows this past week. This brought its year-to-date outflows to $387 million, only now making up 4.4% of the total crypto-assets under management.
Blockchain quiddities have also joined the league of outflows with a total of $5 million in the past week. As well as multi-asset investment products which saw $4.7 million of outflows. The majority of the outflows recorded for last week have been from the Americas, making up more than $98 million outflows. Their European counterparts only recorded $2 million in outflows for the same time period.
Related Reading | Exchange Inflows Ramp Up As Crypto Investors Clamor To Exit Market
What this shows is the general sentiment of investors towards the crypto market no matter what avenue they have invested through. The bear market is expected to last for at least another year and as such, investors have begun to plan accordingly.
The crypto market cap has now fallen below $1 trillion for the first time since January 2021. With sentiment skewing powerfully into the negative, there is no sign of recovery or relief for investors.
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Institutional Investors Refocus On Bitcoin As Market Losses Intensifies
The recent market losses have seen institutional investors shift their focus once more to bitcoin. Inflow and outflow trends paint a very vivid picture of going back towards bitcoin to minimize the losses being realized from altcoins. This has seen most of last week’s inflows going into the pioneer cryptocurrency, as altcoins mark another week of little to no inflow.
$126 Million To Bitcoin
The last week has seen renewed faith in the performance of bitcoin. This is evidenced by the fact that institutional inflows into the digital asset had topped at $126 million. Although the last couple of months have been a bit shaky when it comes to inflows, this indicates that there is the possibility of a complete turn in the tide coming.
Related Reading | Bullish: Bitcoin Marks First Green Weekly Close After Two Months In The Red
With $126 million flowing into bitcoin, the total year-to-date inflows have now surpassed half a billion dollars to be sitting at $506 million. This inflow trend follows the uncertainty that has been rocking the market in the last couple of weeks.
Short bitcoin was not left out of the renewed interest. Inflows had risen to a total of $1.3 million last week. This now brings the total year-to-date inflows to $55 million, which accounts for 30% of all assets under management (AuM).
BTC resumes downtrend | Source: BTUCSD on TradingView.com
Institutional Investors Leave Altcoins
The past week showed lackluster inserts from institutional investors when it came to altcoins. Ethereum which had been experiencing continued outflows would be denied reprieved once more. Its outflow trend had seen another $32 million leaving the altcoin. This saw the ninth consecutive week of outflows for the digital asset. With so much money leaving Ethereum on a weekly basis, its AuM has declined, now making up only 7% of the total AuM.
None of the altcoins saw any inflows for the past week. However, multi-asset investment products still enjoy some positive sentiment from institutional investors. They saw a total of $4.3 million in inflow for the week, continuing its inflow streak all through the market downtrend.
Related Reading | Ethereum Single-Day Liquidations Reach Three-Year High As Price Breaks $1,900
Digital asset investment product inflows came out to a total of $100 million for the past week. The majority of the inflows had been recorded from the Americas, with $88 million coming in from this region alone. The European counterparts had contributed $11 million to the number.
Inflows on a year-to-date basis now sit at $570 million and outflow from investors are at $41 million. The total inflows recorded for last week bring the total assets under management (AuM) to $39.8 billion.
These volumes suggest that institutional investors are fleeing altcoins for the safety offered by bitcoin.
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Institutional Investors Turn To Competitors As Ethereum Tumbles
As the crypto market has taken a turn for the worse, institutional investors are phasing out their investments in Ethereum. The digital asset had been the victim of multiple outflows that had tanked its total AuM (Assets under management) and this trend has continued this week. Instead of moving to a larger competitor, Bitcoin, institutional investors are now moving to networks that are in direct competition with Ethereum.
Big Money Leaves Ethereum To Algorand
Algorand is one of the leading competitors of Ethereum which has been making waves in the decentralized finance (DeFi) space. Due to this, more institutional investors have been choosing to pitch their tent with the smart contract platform. What this has led to is the movement of institutional investors out of Ethereum and into competitors like Algorand.
Related Reading | Cardano TVL Jumps 30% In 24 Hours As It Recovers To $155 Million
Data from last week shows that while Ethereum continues to fall out of favor with big money, Algorand has been right behind it to soak up all of the inflows. This saw inflows into the DeFi protocol reach $20 million. It is a new high for the digital asset and is evidence of growing interest in other DeFi protocols besides Ethereum.
As for the leading smart contract platform, outflows continue to rock the asset. It saw a total of $11.6 million leaving last week. This has brought its year-to-date outflows to a staggering $250 million. Compared to other altcoins, Ethereum has had the worse luck among institutional investors.
ETH trading below $2,000 | Source: ETHUSD on TradingView.com
These other altcoins, which happen to be DeFi protocols, also recorded inflows for the year. Solana and Tron managed $1.8 million and $0.4 million in inflows respectively, indicating that big money remains bullish on these altcoins.
A Not Too Bad Week
For other coins in the market, last week proved to be not terrible. For example, inflows into bitcoin were $69 million. It may not be as high as other weeks of inflows have been but it speaks volumes about how institutional investors are viewing the market even through the present downtrend. Last week’s inflows brought bitcoin’s year-to-date inflows to $369 million, the opposite of Ethereum, which has been dominated by outflows.
One thing to note though is that BTC’s AuM has declined to the lowest point since July 2021. This is not a direct result of institutional investors not putting money in bitcoin. Rather, it is due to the decline in the value of the digital asset over the last couple of weeks.
Related Reading | Bitcoin Dominates Derivatives Market To End May On A High Note
Other vehicles also enjoyed inflows into them. Multi-asset has been a long-time favorite of institutional investors and this shines through even in a bear market as inflows totaled $4.8 million last week. Short bitcoin inflows also reached $1.8 million.
Across the pond, the European market is starting to see a light at the end of the tunnel. After more than a month of consistent outflows, Europe’s inflows reached $15.5 million. However, North America continues to dominate with total inflows coming out to $72 million.
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Wealthy Coinbase clients are still ‘hodling’ Bitcoin since December 2020, data suggests
Institutions that reportedly purchased 10,939 BTC from Coinbase in December 2020 are not selling yet.
Institutional Investors Seek Safe Haven In Crypto Products Amid Market Uncertainty
Institutional investors have been a big part of the crypto market ever since they started investing in the market. Just like every other investors, institutional investors are not immune from the wild price fluctuations that characterizes the crypto market. This has resulted in big money looking for safe havens to move their money into while the worst of the market blows over. Sometimes, they turn to altcoins but this time around seem to have fond better luck with crypto products.
Outflows Rock Market
The recent recovery of the crypto market has been rocked once more by outflows. As prices had recovered, more investors had chosen to take profits and this had lead to more outflows. The previous week saw these outflows from digital investment products grow as high as $141 million in a single week, one of the largest in 2022. This had seen the total assets under management (AuM) decline towards one-year lows, now sitting at $38 billion. The last time AuM was this low had been in July 2021.
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Both Bitcoin and altcoins were not spared the onslaught. For the pioneer cryptocurrency, the inflow trend from the previous week had been swiftly reversed. It instead saw outflows totaling $154 million in a single week, making it the largest loser from last week. In the same vein, Ethereum had also followed in the footsteps of bitcoin with outflows reaching $0.3 million.
Other altcoins would not follow this trend though. Digital assets such as Cardano and Polkadot have been making their way into the radar of institutional investors and this saw both asset bring in $1 million in inflows respectively.
Crypto market cap drops to $1.239 trillion | Source: Crypto Total Market Cap on TradingView.com
Blockchain equity investment products would suffer the same fate as Bitcoin and Ethereum and outflows had reached $20 million. This followed the recent trend of broad sell-off in equities that had seen more investors move out of them.
Multi-Crypto Products Provide HavenB
With so much bad news floating around the market, institutional investors have sought refuge in other places besides directly investing in cryptocurrencies. What they have landed on have been the multi-crypto investment products which have emerged the recent winners for last week.
These multi-crypto investment products saw inflows totaling $9.7 million for last week alone. This has brought the total assets under management to $185 million for multi-crypto investment products, while the total inflows make up 5.3% on a year-to-date basis.
Related Reading | Long Liquidations Continue To Rock Market As Bitcoin Struggles To Settle Above $30,000
It remains one of the best performing when compared to its other counterparts. While others have seen countless weeks of outflows in 2022 so far, there have been only two weeks where multi-crypto investment products had recorded outflows, making it a safer bet for institutional investors during times of market uncertainty.
Nevertheless, year-to-date and month-to-date net flows remain positive for bitcoin. It currently sits at $307 million and $187 million respectively. Although $1.1 million had left the market as a result of outflows from short bitcoin.
Featured image from Moneycentral, chart from TradingView.com
Market Downtrend Trigger Bitcoin Inflows From Institutional Investors
The market continues to be in disarray as the price of bitcoin has now fallen to the low $30,000s. This had been preceded by declining faith in the market thus translating to fewer inflows/more outflows in the last couple of weeks. However, with the price now at the lowest, it has been this year, institutional sentiment towards the digital asset has changed and this has resulted in significant inflows into the digital asset for the first time in weeks.
$45 Million Flows Into Bitcoin
Bitcoin has now seen inflows following several weeks of outflows. The past week has proven to be good for the pioneer cryptocurrency which saw inflows as high as $45 million. It is a complete turnaround from the institutional investor side which has been pulling money out of the digital asset to presumably put towards their altcoin portfolios.
Related Reading | Bitcoin Exchange Inflows Hit Three-Month High As Market Braces For More Downside
Naturally, these institutional investors had been pulling out when indicators had been pointing towards a bear market, and have now returned to take their share of the pie with bitcoin trading at low prices. It marks the return of positive sentiment among these investors.
Short Bitcoin also followed this same trend and has ridden the wave into its second-largest weekly inflows on record. The past week saw $4 million total flow into Short Bitcoin which has now brought its total asset under management (AuM) to a new high of $45 million.
BTC struggles to find support above $31,000 | Source: BTCUSD on TradingView.com
Other digital asset investment products were not left out of the inflow galore. This time around, there was a total of $40 million flowing into digital asset investment products in a surprising turnaround.
Altcoins were not left out of this though even though outflows were more dominant for last week. However, Solana would break away from the mold in this regard to be the only altcoin that recorded any significant inflows with $1.9 million flowing into the Digital asset.
As for other altcoins, the outflows continue as negative sentiment continues to rock the cryptocurrency. It saw $12.5 million leave the digital asset in the one-week period. So far, 0.8% of the total Ethereum AuM has left the digital asset as its year-to-date outflows have now reached $207 million.
Related Reading | Bitcoin Price Crashes Below $30K As Markets Show Signs Of Paranoia
The inflows and outflows remained inconsistent across various market regions. The CoinShares reports show that investment products in the North American markets had recorded $66 million. Across the pond in Europe, outflows dominated with a total of $26 million leaving digital asset investment products in the region.
Nonetheless, the new trend of inflows coming into assets like Bitcoin and Solana prove that institutional investments had come out of the woodwork to take advantage of the price weakness that had been displayed in the market. This price weakness continues with bitcoin still struggling to establish a support level above the $31,000 price range.
Featured image from Investopedia, chart from TradingView.com
Bitcoin Institutional Outflows Near One-Year Highs, More Downside Coming?
With the price of bitcoin still trading below $40,000, institutional inflows into the digital asset have slowed significantly. This has now flowed into other digital assets in the space. But what is most significant is the outflow rate which has neared one-year lows.
Bitcoin Outflows Grows
For the past couple of weeks, the rate at which institutional investors have been pulling money out of bitcoin has been on an accelerated timeline. This is what has culminated in the outflows that were recorded for the digital asset last week.
In the space of a week alone, bitcoin had seen the majority of outflows from the market, which had come out to $120 million for the past week. These outflows had put it dangerously close to its one-year outflow record that was set back in June 2021, at $133 million leaving the digital asset.
Related Reading | ADA On Discount? Cardano Whales Go On $200M Shopping Spree
It was not the only asset to suffer outflows for the week though. Blockchain equities that had mainly been resistant to the outflow trend had finally succumbed. It had seen a total of $27 million left as negative sentiment continues to grow among institutional investors.
Ethereum also continued the outflow trend. A total of $25 million had left the digital asset, bringing its year-to-date outflows to $194 million.
BTC trending at $38,000 | Source: BTCUSD on TradingView.com
This marks the 4th consecutive week of outflows in the market. It now sits at a total of $339 million that has left the market in this 4-week period. It also reflects a generally bearish sentiment that is being felt across the market as the Fear & Greed Index had dived into the extreme fear territory.
Despite this overwhelming negative sentiment, not every digital asset in the space had suffered the same fate. FTX Token came out as the unlikely winner of the week by bringing in the largest inflows. The digital asset spearheaded the inflow trend with a total of $38 million moving into the asset last week.
Related Reading | Experts Say Ethereum Will Grow 100% To Hit $5,783 By Year-End
Other large altcoins mainly followed this trend through with big players such as Terra and Fantom. Although these digital assets had not done nearly as well as FTX Token but had seen inflows regardless. It had come out to $0.39 million and $0.25 million recorded respectively for both.
Bitcoin still remains an investor favorite despite the inflows though. It continues to hold steady at the $36,000 to $38,000 support level. Its price had briefly recovered above $39,000 in the early hours of Wednesday before declining to be trading at $38,935 at the time of this writing.
Featured image from MARCA, chart from TradingView.com
Why A “Boring” Bitcoin Could Be A Good Thing
The current bitcoin trend can be described as “boring” by a lot of folks in the market. However, it is good to look at what this would mean in a space like the crypto industry that is used to fast-moving prices and quick-changing momentum. While the word “boring” may sound bad to investors who are used to these characteristics, Director of Global Macro at Fidelity, Jurrien Timmer, explains why this could inherently be a good thing for the digital asset.
Draw In Institutional Investors
The need for institutional investors in bitcoin cannot be overstated. For the digital asset to get to some of the forecasted values, institutional investors moving into the market has become a necessity. But will these institutional investors want to move into a highly unpredictable asset such as bitcoin?
Related Reading | Halfway To The Halving: What This Means For Bitcoin
In his recent Twitter thread, Timmer explained that a “boring” bitcoin is important if institutional adoption is to be expected. Pointing to the S2F model created by the infamous Plan B, he explains that bitcoin has closely followed this model. However, there is a deviation that is starting to take place.
The Director explained that instead of continuing to track the S2F model, BTC had instead started to follow the pink line which marked demand in the chart shared. This meant that as effective as Plan B’s model has been in the past, it seems bitcoin is cutting out a new trend for itself and that is now entirely driven by the demand.
“So, in a more efficient two-way market, Bitcoin should deviate around that pink line, up and to the right,” Timmer explained.
BTC sticking close to pink demand line | Source: Twitter
Bitcoin Behaving Like A Traditional Asset
Now, one of the great gospels of bitcoin is how different the digital asset is from traditional risk assets. Nevertheless, as more time has passed and adoption is growing, it is beginning to behave more like a traditional risk asset. As more understanding comes, the investors who are purchasing the asset move from simply a price standpoint and move towards more efficient accumulation.
Timmer notes in his Twitter thread that institutional investors have likely come up with their own models which will help them know when a good time to buy bitcoin is. This could help them map out if they can get a 1.5x or 3x return from buying at a particular price.
BTC trading in the mid-$42,000s | Source: BTCUSD on TradingView.com
“For instance, If the demand model says that Bitcoin’s intrinsic value is $50k today and $100k two years from now (my thesis), then at $30k Bitcoin is going to look a lot better than at $70k,” he noted. Adding that “Price is what you pay but value is what you get.”
Related Reading | How Bitcoin Futures Premiums Exhibit Signs Of Market Exhaustion
Timmer closes out his thread explaining that getting the demand curve right would be very important “If indeed price starts to move more closely around an upwardly sloping demand curve.”
Featured image from MarketWatch, chart from TradingView.com
What is driving institutions to invest in crypto? BlockFi’s David Olsson explains
“Out of the 80% of Top 50 hedge funds in the world we’ve spoken to, they all are embarking on some sort of crypto journey,” says Olsson.
Institutional crypto funds see largest capital inflows for 3 months
The data from CoinShares shows a weekly inflow of $193 million, with more than half of that figure going to Bitcoin alone. Solana is also getting attention and broke a record in the process.
