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.
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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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