Institutional Crypto Investment Products see Outflows for the Fourth Consecutive Week
CoinShares released its latest Digital Asset Fund Flows Weekly Report, which shares insights about institutional crypto investment products.
The report reveals that institutional crypto investment products experienced outflows of nearly $20 million and minor inflows into short investment products.
Bitcoin products hit hardest, short Bitcoin products see minor inflows
BTC products took the heaviest hit of outflows at $20.1 million, while short Bitcoin products saw minor inflows of $1.8 million. Short-BTC products have enjoyed the second highest year-to-date inflows, about $50 million to Bitcoin’s $126 million.
Altcoin investment products enjoy minor inflows
Most altcoin investment products enjoyed minor inflows last week. Multi-asset investment vehicles, those investing in a basket of digital assets, raked in $0.8 million in inflows last week. Ethereum (ETH) products took in $0.7 million, while Solana (SOL) took in $0.3 million. Binance (BNB) and Cosmos (ATOM) products both had minor inflows, $0.4 million and $0.2 million, respectively.
Regulatory uncertainty may be causing investors to rush to short BTC products
Coinshares believes regulatory uncertainty may cause investors to rush to short BTC products. The report states:
“Despite the recent inflows into short-bitcoin, total assets under management (AuM) have risen by only 4.2% YTD [year-to-date] compared to long-bitcoin AuM having risen by 36%, suggesting short positions have not delivered the returns some investors expected this year so far. Nonetheless, it likely represents continued investor concerns over regulatory uncertainty for the asset class.”
Investors remain cautious over regulatory uncertainty for the crypto industry
The ongoing regulatory uncertainty in the crypto industry has led to many investors remaining cautious. The recent decision by the US Securities and Exchange Commission (SEC) to delay the approval of a Bitcoin ETF has further highlighted this issue. Many investors are now opting for short-BTC products to mitigate their exposure to the risks associated with investing in cryptocurrencies.
The future of institutional investment in the crypto industry remains uncertain
Over the past four weeks, the outflows from institutional crypto investment products highlight the uncertainty surrounding institutional investment in the crypto industry. While the overall trend for long-BTC products remains positive, the growing popularity of short-BTC products suggests that many investors are looking to minimize their risk exposure. The regulatory landscape will be a key factor in determining the future of institutional investment in the crypto industry.