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There are plenty of alternatives for institutions that want to invest in crypto and they are also present in this field. Although the spot Bitcoin ETF has not yet been approved, various mutual funds make it easier for institutional investors to invest in Bitcoin and altcoins. But things are not going so well these days. Recent data has been troubling.
Cryptocurrency Report
European cryptocurrency investment firm CoinShares released its latest report within 24 hours. The Digital Asset Fund Flows Report allows us to track the performance of crypto-focused funds over the last 1 week. Unfortunately, the flight from cryptocurrency funds continued in the past week. Outflows last week reached $54 million. According to CoinShares, this “brings total outflows to US$200 million, representing 0.6% of total assets under management (AuM),” which doesn’t bode well.
Recession fears, signals that the Fed will continue to raise interest rates, US regulatory pressure, market makers pulling out of the market, and dozens of other reasons make cryptocurrencies an extra risky market.
Bitcoin and Altcoins Institutional Demand
According to the report, Bitcoin funds witnessed outflows of $38 million. Over the past four weeks, total BTC outflows reached $160 million, representing 80% of all outflows. Furthermore, when outflows from short positions in Bitcoin were combined, the total value of outflows related to this asset alone reached $201 million. These figures strongly emphasize that recent investor activity has been heavily focused on Bitcoin.
Outflows from multiple crypto mutual funds totaled around $7 million. Inflows into some altcoins were notable, albeit small. Some risk-on investors increased their positions in altcoins with average inflows of $1 million. These altcoins were Cardano, Tron and Sand. Binance Coin (BNB) was the only altcoin to experience outflows.
A recent survey by Bloomberg’s Markets Live Pulse shows that in the event of a theoretical debt default in the US, Bitcoin could emerge as one of the top three assets, along with gold and US Treasuries. However, we have been through similar processes in the past, and we may see an environment where this possibility is never on the table, probably because the Republicans will be stubborn and raise the debt ceiling.
