Institutional Crypto Inflows Return, BTC Products Gain Popularity

After 6 weeks of significant correction, the crypto market has come back with decent price gains in the last few days. During the last week, institutional cryptocurrency flows turned positive as the digital asset investment products saw inflows worth $14 million. BTC and multi-asset investment products led the latest inflow.

The total value of global crypto assets under management (AUM) stayed above $50 billion last week. However, the number has dropped to the lowest level since August 2021. In November last year, crypto AUM touched an all-time high of $86 billion.

“Bitcoin saw inflows totaling US$14m last week, having suffered outflows of US$317m, representing 1% of AuM, in the prior 5 weeks. Of the Altcoins, Cardano, Polkadot and Solana saw inflows totaling US$1.5m, US$1.5m and US$1.4m, respectively. Investors continue to add multi-asset (coin) investment products to positions with US$8m last week,” CoinShares added in its weekly digital asset fund flows report.

Institutional crypto outflows started declining during the second week of January 2022. The recent spike in inflows indicates that the positive market sentiment has returned.

Pressure on Ethereum

ETH has remained the hardest-hit crypto-asset among the top 3 in the last 4 weeks. The digital asset started this year at a price level of $3,800 and plunged below $2,300 on 24 January 2022. Institutional money followed the price trend and the outflows spiked in the mentioned period. Even in the last week, ETH investment products saw outflows totaling $16 million.

“Ethereum continues to see outflows, with US$16 million of outflows last week. The current 7 week run of outflows now total US$245 million, or 2% of AuM, highlighting much of the recent bearishness amongst investors has been focused on Ethereum rather than Bitcoin,” CoinShares noted.

The total value of ETH-related crypto assets under management currently stands at around $12.5 billion.