In the last few weeks, small amounts of money have been put into investment products for digital assets. This shows that institutional investors are still “hesitant” about crypto, which is likely because the US economy is slowing down.
In the most recent “Digital Asset Fund Flows” report from CoinShares, the head of research, James Butterfill, pointed out that institutions are still hesitant about crypto investment products, even though “minor inflows” have been seen for the third week in a row:
“The flows remain low, which shows that investors are still hesitant. This is shown by the fact that investment product trading volumes for the week were US$886 million, the lowest since October 2020.
Between Sept. 26 and Sept. 30, the most money went into Bitcoin (BTC) investment products, which brought in $7.7 million. Ether (ETH) investment products came in second with $5.6 million. The only other significant source of $2.1 million was the sale of short BTC products.
These inflows were cancelled out by outflows of more than $3.5 million from investment products that gave access to altcoins like Polygon (MATIC), Avalanche (AVAX), and Cardano (ADA). Multi-asset and Solana (SOL) funds also lost $700,000 and $400,000, respectively, during that week.
Markus Thielen, head of research and strategy at Singapore-based crypto financial services platform Matrixport, said this about the current state of the crypto market and how institutions are looking at it:
“The market is in a wait-and-see mode right now, but if things change for the better after the US midterm elections, there could be big changes to the rules.”
” Last night’s US economic data, especially the ISM index, showed that growth in the US economy has slowed down significantly, and there is now a chance that the Fed will be less aggressive. The USD rally seems to have lost one of its main reasons, which could mean that rate hikes will stop for a while. “This could be very good for digital assets through the end of the year,” he said.
As of September 30, the month-to-date (MTD) flows show that institutional investors have sold the most ETH products, even though the Merge happened on September 15. They have sold $65.1 million worth of ETH products.
“Looking back, the merger was bad for the sentiment. In September, US$65 million left the market. ” “Increased scrutiny from regulators and a strong US dollar are likely to blame for the fact that the switch to proof of stake went well,” said Butterfill.
MTD, on the other hand, only invested $15.2 million and $3.2 million in short BTC funds and BTC investment products, respectively.
Less money is leaving crypto ETFs.
Even though CoinShares hasn’t seen much action in crypto investments lately, Bloomberg Intelligence has seen a clear trend in crypto exchange-traded funds (ETFs).
Bloomberg Intelligence data shows that institutional investors sold $17.6 million worth of crypto ETFs in Q3 2022. This is a big difference from Q2 2022, when “a record $683.4 million was withdrawn from such funds.”
“Most of the money has left the country in the last two months. In July, investors put more than $200 million into crypto ETFs, according to a Sept. 30 article from Bloomberg. The article also said that the decrease in outflows was likely due to “narrow fluctuations” in the prices of cryptocurrencies during Q3.
