Institutional Bitcoin inflow increases amidst market downtrend
Institutional investors continue to bank on Bitcoin and Solana despite the market meltdown
By Shashank Bhardwaj
Despite a cryptocurrency market downturn marked by the collapse of Terra's $LUNA and its UST stablecoin, institutional investors are banking on the flagship cryptocurrency Bitcoin (BTC) and Ethereum rival Solana (SOL).
As stated in the new report from CoinShares, BTC investment products saw $45 million in inflows over the last week, as the assets under management for these fell to quite comparable levels "seen during the lows in sentiment seen at the beginning of the year".
According to the firm's analysis, digital asset investment products witnessed $40 million in inflows last week, indicating that investors are taking advantage of "substantive price weakness to add to positions."
According to CoinShares, a jump in investment product trading activity that would generally be seen during "severe price weakening periods" hasn't occurred, although it's "too early to determine if this represents the end of the 4-week run on negative sentiment."
According to the report, negative sentiment towards Ethereum contributed to outflows of $12.5 million last week, bringing ETH outflows year-to-date to $207 million, or 0.8 percent of assets under management.
Last week, Ethereum rival Solana was the "sole altcoin to see any substantial inflows," totaling to $1.9 million.
The short Bitcoin investment products witnessed the second largest weekly inflows at $4 million as the investors bet against the top cryptocurrency.
The price of bitcoin has plummeted down by over 33 percent, while the market capitalization of the cryptocurrency space has fallen by 38 percent. According to the reports, these falling prices have led to unrealised losses for at least 40 percent of bitcoin investors.
As per the on-chain analytics firm Glassnode, when BTC was trading at around $33,800, around 60 percent of BTC investors were earning profits and the rest 40 percent had unrealised losses. The report defined network profitability as a "drop in the percentage of addresses, entities, and/or supply in profit."
Bank of America's experts expect an ongoing correlation between Bitcoin and equities to persist in the foreseeable future. Furthermore, while bitcoin is frequently compared to gold, the link between the flagship cryptocurrency and the precious metal has been trending downward since June 2021.
Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash