After almost two months of capital inflows into institutional crypto-asset funds, the trend has reversed resulting in a week of outflows.
Institutional fund flows often lag behind retail crypto markets but they have caught up over the last week according to the CoinShares’ weekly roundup.
In its Digital Asset Fund Flows Weekly report published on March 14, the crypto asset fund manager revealed that there was a total outflow of $110m for the period. This is the first week of outflows since mid-Jan and the largest outflow for nine weeks.
The company cited increasing regulatory worries as the primary concern for institutional investors. Last week saw the signing of the long-awaited US government executive order to research a regulatory framework for crypto assets. However, many in the industry viewed it as a positive development even though no concrete action was taken.
“Regulatory concerns and geopolitics remain at the forefront of investors’ concerns for digital assets.”
BTC and ETH products losing ground
Bitcoin-based funds saw the largest outflows with $70m leaving various institutional products. The asset itself has remained range-bound over the past seven days, consolidating just below the $40k level.
Ethereum funds also took a hit with an outflow of $50m for the period. ETH prices have also remained relatively flat over the past seven days, trading in the mid-$2k zone.
Altcoins, or multi-asset investment funds, fared much better with an $11.7m inflow for the week, according to CoinShares.
North American funds lost the most, at $80m, while $30m exited Europe-based funds. Investment products traded $1bn last week, slightly lower than the average of $1.24bn. This represented just 5% of total Bitcoin trading volumes.
Grayscale’s Bitcoin Trust currently has $24.9bn in assets under management and shares are still trading at a massive discount of 29.43%, which is almost its lowest ever discount to net asset value (NAV).
Retail traders HODLing crypto
On-chain analytics provider Glassnode reported increased selling last week. However, it is not all bearish since shorter-term Bitcoin buyers are slowly transitioning into long-term HODLers. It added that it has been two years since a major capitulation event, but did not rule one out in the coming months.
“Despite weaker short-term demand, HODLing remains the preferred strategy, with the proportion of younger coins now at all-time-lows. This is historically associated with late stage bear markets.”
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