Institutional Crypto Flows Still Weak But ETF Exit Slows

According to a CoinShare weekly report published on October 3, there has been an outflow of about $10 million over the past week, indicating that institutional investors are still hesitant.

It’s the third week in a row that there has been a marginal inflow, but confidence in crypto products has yet to return as the bear market deepens.

Bitcoin and Ethereum funds saw smaller outflows of $7.7 million and $5.6 million, respectively, but there was negative sentiment toward cryptocurrencies with an outflow of $3.5 million, according to the report.

Large ETF flows exceeded

CoinShares measures the institutional flows of digital asset products around the world. It indicated that trading volumes on investment products for the week amounted to $886 million, the lowest level in two years.

In a related report, Bloomberg noted that money flowing from institutional crypto products slowed in the third quarter, adding that it is “a sign that many bearish investors may have already exited the risky asset class.”

Data from Bloomberg Intelligence revealed that only $17.6 million were withdrawn from exchange-traded funds (ETFs) in the third quarter. It added that this represented a 97% decrease from the $683.4 million that was withdrawn in the second quarter.

“I wonder if the second quarter was the ‘get me out’ part of these funds,” Todd Sohn, ETF strategist at Strategas Securities, commented, adding that some investors stayed in the asset class and waited for a recovery.

The strategist went on to point out that those who invest in ETFs are different from token holders because they can do so to hedge the risks associated with buying crypto outright.

darker macro clouds

Corporate and retail sentiment is unlikely to change while these dark macroeconomic clouds still loom. Retail sentiment is currently very bleak, with the Bitcoin “Fear and Greed” index currently registering an intense fear of 20.

On a brighter note, on October 3, the Financial Times reported that crypto-exchange-traded products (ETPs) have seen global net flows of $379 million so far this year despite the underlying cryptocurrency market up 57% since the start of 2022.

Todd Rosenbluth, head of research at data analytics ETF VettaFi, said that “there are strong beliefs about the long-term potential of cryptocurrencies and the value they can add to a portfolio, so investors have taken advantage of volatility to add exposure instead of walking away.”

The spot markets are currently up 1.2% on the day, with a market capitalization of $980 billion at the time of writing.

Institutional crypto inflows remain weak but ETF Exodus Abates debuted on CryptoPotato.

Leave a Reply

Your email address will not be published. Required fields are marked *