A recent study by CoinShares reveals that institutional cryptocurrency investment products have seen historically low volumes, with just $1 billion over the past week. This is 55% below the annual average, and the second worst performance of the year.
Bitcoin disinterests institutionals
At the end of August, institutions showed a particular disinterest in digital assets. In any case, this is what a recent study by CoinShares. Cryptocurrency investment products have had their third consecutive week in the redthat is, with outputs larger than inputs.
For information, investment products include AND Fthem AND P and all the others specialized funds providing exposure to various assets. They are notably issued by Grayscale, ProShares, 21Shares or CoinShares.
In total this week, these are $8.7 million who left the various digital asset investment products mentioned above. Furthermore, Bitcoin (BTC) seems to be the big loser. Funds offering exposure to the market’s first cryptocurrency have seen $15.3 million escape within 7 days.
Fig. 1: Table of fund volumes by asset
On the other hand, Ether (ETH) is doing relatively better. Funds offering exposure to the asset recorded small weekly inflows of $2.9 million in total. On the eve of the most important event in its history, Ethereum continues to attract the spotlight.
However, the overall picture remains bleak. All of these products dedicated to institutional investors only totaled than a trillion dollars in transaction volumes on this week. This is 55% less than the annual average and this marks the second worst performance of 2022.
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Too strong a correlation with equity markets?
This study tells us that the majority of negative institutional sentiment towards cryptocurrencies is focused on Bitcoin. Indeed, its price has relapsed sharply in recent days after having failed to break through the resistance of $25,000 and is currently evolving around $21,000.
This high volatility can be precisely explained by the growing correlation between traditional financial markets and the cryptocurrency market. This is particularly the case in Asiaa situation that also forced the International Monetary Fund (IMF) to sound the alarm this Sunday.
Still, the recent falls in the equity and cryptocurrency markets simply reveal the anxiety of the majority of investors. Indeed, the speech of Jerome Powell next August 25, Chairman of the Federal Reserve of the United States (FED), is clearly feared.
The US central bank is expected to announce, through its president, a continuation of its policy of restriction and a rise in interest rates. This would then mean an even greater slowdown in inflows of capital to the financial markets, and ultimately, an extension of this bear market.
👉 On the same subject — Bear market and massive layoffs: how is the cryptocurrency industry doing?
Source: CoinShares Report
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Freelance writer located between Paris and Toulouse. I want to share my passion for the world of cryptocurrencies to as many people as possible. I am also interested in technical analysis and trading.
Lilian Aliaga
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