Five weeks of outflows have finally ended and institutional investment is now flowing back into crypto funds. BTC is the preferred asset, while ETH is falling out of favor.
Crypto investment firm CoinShares published its weekly Digital Asset Fund Flows Report on January 24, and found inflows for certain institutional products.
As $14.4 million was re-entered into the space, investors bought the dip. This is the first net positive inflow in five weeks.
Researchers reported that the inflows occurred during significant price weakness. They also suggested that investors are “seeing this as a buying opportunity” at current prices.
CoinShares’ own BTC fund continued to be the source of capital, but 21Shares, ProShares, and ProShares saw minor gains. The majority of inflows were for Bitcoin, which was $13.8 million for the week. Ethereum suffered the most with an outflow amounting to $15.6 million. However, multi-asset products were able to make up the difference and resulted in an overall net inflow.
CoinShares noted that the seven-week-old run of ETH outflows is now $245 million, “highlighting the fact that much of the bearishness among investors in recent weeks has been focused more on Ethereum than Bitcoin.”
Analyst Willy Woo suggested that there are early signs that institutional money is starting to return.
Early indications suggest that institutional money may be returning in large numbers. pic.twitter.com/4P7d3Fmq4I
Willy Woo (@woonomic), January 24, 2022
The report shows that the fund’s total assets under management was $51 billion. This is the lowest point since August 2021. Due to the declining value of the underlying assets in the last few months, the AUM has been depressed. Grayscale, the largest fund in the world, had no changes in its AUM, which was $30.6 billion according to its most recent update on January 25, but the fund was trading at an unprecedented 30% discount.
Related: Coinshares and Bitcoin metrics suggest that bearish sentiment could soon recede
Cointelegraph reported that traders and analysts were searching for entry points after Bitcoin’s bounce.
According to Tradingview, the asset fell to a 6-month low of $33K on Monday trading. However, it has since rebounded solidly and returned to $36,276 as of this writing. Weekly institutional inflows will likely follow if spot market momentum continues in this direction.
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