Institutional Crypto Funds See Seventh Week of Capital Inflows

Key Insights:

• Around $127 million went into crypto-related funds last week.
• American funds dominated inflows while there were outflows from Europe.
• Bitcoin was the asset of choice for the week with a $95 million inflow.

According to digital asset manager CoinShares, crypto investment products saw inflows of $127 million last week. The report, published on March 7, analyzed capital flows to and from major institutional crypto funds.

There have been seven consecutive weeks of positive inflows suggesting that institutional investors are still interested in crypto despite the recent retail sell-off.

CoinShares also stated that they observed,

“an uptick on the previous week, suggesting investors remain supportive of digital assets despite the recent geopolitical events.”

North American funds saw the most inflows with $151 million, while there was an outflow of $24 million from European-based funds.

Bitcoin Funds Dominate

Bitcoin (BTC) has been the asset of choice for institutional investors over the past week. With $95 million inflows marking the largest single weekly inflow since early December 2021.

However, there was also a $25 million inflow for Ethereum (ETH)-based products which follows a run of negative sentiment for the asset, CoinShares noted.

Multi-asset crypto funds saw inflows of $8.6 million, but those based on individual altcoins remained flat on the week. The Purpose crypto fund saw the largest of these inflows with $130 million, while CoinShare’s fund saw an outflow of $21.5 million.

The overall sentiment among institutional investors is positive despite crypto markets contracting by 10% since the beginning of the month. Next week’s Digital Asset Fund Flows report may paint a different picture.

Exchange Balances Continue to Outflow

On-chain analytics provider Glassnode also released its weekly report observing that Bitcoin balances on major exchanges have been a net negative for the past seven months. The firm summarized:

“The Bitcoin market is in a delicate equilibrium, with limited incoming demand, alongside a slowing sell-side.”

Flows to and from cryptocurrency exchanges can help determine market sentiment. When Bitcoin is leaving exchanges, it suggests that investors are holding the asset, whereas inflows indicate that they are preparing to liquidate.

It reported that a total of 46,000 BTC worth around $1.8 billion at current prices had left crypto exchanges since July last year.