Rise in Inflows in Crypto Funds for the First time in 5 Weeks
After five weeks of constant outflows, institutional investment is finally trickling back into crypto funds, with BTC the asset of choice and ETH falling out of favour. In its weekly Digital Asset Fund Flows report published on Jan. 24, crypto investment firm CoinShares observed inflows for some institutional products.
In five weeks, it is the first time that there has been a net positive inflow as $14.4 million re-entered the space with investors buying the dip. In addition, the researchers reported that these inflows came during a period of significant price weakness, suggesting that investors “are seeing this as a buying opportunity” at current price levels.
Capital continued to flow out from CoinShares own BTC fund. However, 21Shares and ProShares registered minor gains. Most of the inflows were for Bitcoin, which had $13.8 million for the week. Ethereum was the biggest loser with an outflow of $15.6 million over the period, but the multi-asset products made up the balance, resulting in an overall net inflow.
CoinShares observed that the current seven-week run of ETH outflows now total $245 million, “highlighting much of the recent bearishness amongst investors has been focused on Ethereum rather than Bitcoin.”
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Nearly $14 million has been returned to BTC institutional funds over the past week, but Ethereum-based products still see major outflows. After five weeks of constant outflows, institutional investment is finally trickling back into crypto funds, with BTC the asset of choice and ETH falling out of favour.
In its weekly Digital Asset Fund Flows report published on Jan. 24, crypto investment firm CoinShares observed inflows for some institutional products.
The rise in Crypto Funds gives Hope For the Scope of Digital Assets
In five weeks, it is the first time that there has been a net positive inflow as $14.4 million re-entered the space with investors buying the dip.
The researchers reported that these inflows came during a period of significant price weakness, suggesting that crypto investors “are seeing this as a buying opportunity” at current price levels.
Capital continued to flow out from CoinShares own BTC fund. However, 21Shares and ProShares registered minor gains. Most of the inflows were for Bitcoin, which had $13.8 million for the week. Ethereum was the biggest loser with an outflow of $15.6 million over the period, but the multi-asset products made up the balance, resulting in an overall net inflow.
CoinShares observed that the current seven-week run of ETH outflows now total $245 million, “highlighting much of the recent bearishness amongst investors has been focused on Ethereum rather than Bitcoin.”
Analyst Willy Woo also suggested early signs that institutional funds are starting to return: Analysts and traders were looking for entry points following Bitcoin’s bounce and reclamation of $36K, as reported by Cointelegraph.
However, the total assets under management for the funds included in the report were $51 billion, its lowest level since early August 2021. The AUM has been depressed due to the falling value of the underlying assets over the past couple of months. There was no change in the world’s largest fund, Grayscale, which has $30.6 billion in AUM according to its latest update on Jan. 25; however, the fund was trading at a record discount of around 30%.
The asset plunged to a six-month low of $33K during late Monday trading, according to Tradingview but has since recovered solidly with a 10% return to $36,276 at the time of writing. Should spot market momentum continue in this direction, weekly institutional inflows are likely to follow. This is good news for institutional crypto funds since these will provide a good way for the cryptocurrencies to have their dominance back.