Funding inflows to cryptocurrency investment funds surged last week as Ethereum (ETH) products broke a nine-week outflow period in the latest sign that institutional managers are reaccumulating assets.
Data from CoinShares released on Monday showed that digital asset investment products registered a cumulative inflow of $75.3 million last week. Bitcoin (BTC) investment products received $25.1 million in inflows, while Ethereum products raised $20.9 million in capital.
Positive inflows have also been reported for multi-asset funds exposed to multiple cryptocurrencies. Products Solana (SOL), Polkadot (DOT) and XRP also posted net positive results for the week.
Crypto asset flows have risen for four consecutive weeks, indicating that the massive drawdowns at the end of 2021 are beginning to change. Cryptocurrency funds raised $209 million in four weeks.
At the end of 2021, institutional managers reduced their involvement in crypto products, perhaps in order to lock in profits before the end of the year, but also to wait out extreme market volatility. The Bitcoin Fear and Greed Index, which measures market sentiment, fell to “extreme fear” in early January. The index has stabilized in recent weeks and the latest data shows that the market has come out of extreme fear.
Are we just in the middle of a big bear cycle? Analyst @AriRudd points out three indicators that could lift Bitcoin to $24k-$27k. https://t.co/AkSAehinSc— Cointelegraph (@Cointelegraph) February 14, 2022
While analysts remain divided over whether the market has made a final bottom or whether Bitcoin and Ethereum can expect to retest their 2022 lows, CoinShares’ influx data is a good barometer for institutional investor sentiment. As reported, institutional demand for crypto assets has grown significantly over the past year and is playing an increasingly important role in influencing market dynamics.
Related: Willy Wu: ‘Peak of Fear’ But Network Metrics Say It’s Not a Bear Market
UPDATE 02/11/22: Net assets under management, share of ownership per share and market price per share for our investment products. Total AUM: $37.6B $BTC $BAT $BCH $LINK $MANA $ETH $ETC $FIL $ZEN $LTC $LPT $XLM $ZEC $UNI $AAVE $COMP $CRV $MKR $SUSHI $SNX $YFI $ ADA $SOL $AMP pic.twitter.com/stTPqefvo8 — Grayscale (@grayscale) February 11, 2022
Grayscale, the largest crypto asset manager, currently manages $37.6 billion in assets and plans to transform its flagship GBTC Bitcoin product into an exchange-traded fund (ETF). Grayscale’s Bitcoin ETF filing, opening the door for further public comment on the matter.
Meanwhile, in Canada, the Purpose Bitcoin ETF continues to register large inflows, reflecting strong investor interest in the spot product.