Institutional Crypto Inflows Remain Weak But ETF Exodus Abates

Institutional Crypto Inflows Remain Weak But ETF Exodus Abates


According to CoinShares’ weekly report published on Oct. 3, there has been an inflow of around $10 million over the past week suggesting institutional investors are still hesitant.

It is the third week in a row that there has been a marginal inflow, but confidence over crypto products has yet to return as the bear market deepens.

bitcoin and Ethereum funds saw minor inflows with $7.7 million and $5.6 million, respectively, but there was negative sentiment for altcoins with a $3.5 million outflow, according to the report.

Major ETF Outflows Over

CoinShares measures institutional flows for digital asset products across the globe. It noted that investment product trading volumes were $886 million for the week, the lowest level for two years.

In a related reportBloomberg noted that funds flowing third out of institutional crypto products in the quarter had slowed down, adding that it is a “sign that many bearish investors may have already piled out of the risky asset class.”

Data from Bloomberg Intelligence revealed that just $17.6 million was withdrawn from crypto exchange-traded funds (ETFs) in the third quarter. This is a 97% reduction from the whopping $683.4 million withdrawn from such funds in the second quarter, it added.

Todd Sohn, an ETF strategist at Strategas Securities, commented, “I wonder if the second quarter was the ‘get me out’ part of these funds,” adding that some investors remained with the asset class waiting for the rebound.

The strategist continued to point out that those investing in ETFs are different from token holders as they may do so to hedge the risks associated with buying crypto directly.

Macro Clouds

Institutional and retail sentiment is unlikely to change while these dark macroeconomic clouds still loom. Retail sentiment is currently pretty grim, with the Bitcoin ‘fear and greed’ index currently registering an extreme fear of 20.

On a brighter note, on Oct. 3, the FT reported that crypto exchange-traded products (ETPs) have enjoyed global net inflows of $379 million so far this year despite the underlying crypto market taking by 57% since the beginning of 2022.

Head of research ETF data analytics company, VettaFi, Todd Rosenbluth, said that “there are big believers in the long-term potential of crypto and the value it can add to a portfolio, so investors have been taking advantage of volatility to add exposure instead of moving away.”

Spot markets are currently up 1.2% on the day, with the market cap reaching $980 billion at the time of writing.


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