Institutional crypto inflows at lowest level since October

Institutional crypto inflows at lowest level since October

Managers bought $21m worth of digital asset products last week, according to CoinShares. Ether continues to be the most popular investment.

Capital flows into cryptocurrency investment products rose again last week. The pace of growth has slowed since the beginning of the year, possibly indicating a current peak in institutional demand.

Net inflows totalled $21 million in the year to 27 March, according to data from European digital asset manager CoinShares. This was the lowest level since October 2020, when Bitcoin (BTC) was below US$14,000.

With the low investment volume, investor demand for crypto assets is also gradually declining. The decline coincided with an unspectacular price performance of Bitcoin Superstar scam key assets such as Bitcoin and Ether (ETH). The two failed to test new highs in recent weeks. Daily trading volume for digital investment products fell to $788 million last week. This compares to US$900m in 2021.

CoinShares noted that selling was also responsible, as investors who had a large unrealised gain wanted to lock it in.

„We have recently seen a significant decline in inflows and, in some cases, outflows in the larger and longer-held pre-2016 investment products,“ the asset manager added:

„We believe this is due to investors who have been up for several years taking their profits.“

Bitcoin investment products generated almost half of the total weekly inflows, but Ether products by market cap were the most popular.

Inflows into ETH investment funds rose by $5.4 million last week

Total inflows increased for 21Shares and Purpose’s exchange-traded fund. In contrast, they declined at CoinShares and were virtually stagnant again at Grayscale.

Despite the modest decline in inflows, institutional investors are the driving force behind the bull market in cryptocurrencies. As CoinShares reported last week, crypto assets held by institutional investment managers have surpassed $57 billion. And while Bitcoin and Ether remain below their all-time highs, the total market capitalisation of all cryptocurrencies rose to record levels on Monday. The total market capitalisation of all cryptocurrencies was just over US$1.83 trillion, according to CoinMarketCap.