Institutional Crypto Fund Flows Flip Negative as Markets Retreat

Digital asset investment products have returned to negative territory following four weeks of solid inflows.

According to asset manager CoinShares, there was a total outflow of $6.5 million from crypto funds last week, reversing the trend of inflows.

However, the outflow is minor compared to the prior four weeks, which totaled $742 million of inflows.

🔎 Let’s have a look at last week’s fund flows with CoinShare’s Head of Research James Butterfill.

⬅️ Digital asset investment products saw minor outflows totalling US$6.5m, following 4 prior weeks of inflows that totalled US$742m.

🧵1/5 pic.twitter.com/I32OtNbGV5

— CoinShares (@CoinSharesCo) July 24, 2023

Pro Investors Switch to ETH Funds

Bitcoin saw the lion’s share of outflows, with $13 million leaving such funds and products. Furthermore, short BTC investment products saw outflows for the 13th consecutive week totaling $5.5 million.

The paper also showed a slump in trading volumes last week. They were below the year-weekly average at $1.2 billion, less than half of the $2.4 billion in volume the previous week.

The negative sentiment was primarily focused on the North American market as the regulatory war on crypto continues.

However, the news was not all bad in the world of institutional investment. Professional traders have flipped from Bitcoin to Ethereum, with ETH-based funds seeing an inflow of $6.6 million for the week.

This “suggests sentiment, which has been poor this year, is slowly beginning to turn around,” noted CoinShares.

Ripple-related funds also saw $2.6 million of inflows due to the firm’s recent partial victory against the SEC and XRP prices getting a major boost.

Solana, Uniswap, and Polygon saw inflows totaling $1.1 million, $0.7 million, and $0.7 million, respectively, the report revealed.

The overall picture could be a signal that sentiment is about to switch back to negative, however. Previously low weeks of institutional flows following larger ones have led to trend reversals.

Crypto Market Lethargy Continues

Crypto market volatility, volumes, and liquidity are at multi-year lows as asset prices remain stagnant.

The total market cap has dropped a further 1.4% on the day to $1.21 trillion, but it remains within its tight multi-monthly range.

Bitcoin prices have dipped 2.3% as the asset tumbles towards $29,000 and sentiment weakens. The asset currently trades at its lowest level in over a month.

Ethereum is moving in its shadow with a 1.2% slide to $1,847 at the time of writing. The rest of the altcoins are a sea of red aside from Dogecoin, which is up 9% on the day.