Institutional crypto investors have been gradually withdrawing from the market, particularly as the prolonged bear market persists. While other assets have also experienced outflows, Ethereum seems to be at the forefront of this trend, with its total assets under management (AuM) taking a significant hit. The decline in Ethereum’s popularity can largely be attributed to its struggle in maintaining support levels after falling below $1,600. CoinShares, an alternative asset manager, recently published its Digital Asset Fund Flows Weekly Report, shedding light on the growing aversion by institutional investors towards Ethereum. The report reveals a continuous exodus of funds from Ethereum over several months, resulting in a decline in its assets under management at a faster rate compared to other cryptocurrencies. The outflows persist, with last week alone witnessing a total outflow of $4.8 million from Ethereum funds. So far this year, Ethereum has experienced a total outflow of $108 million, accounting for 1.6% of its total assets under management, making it the most affected asset by outflows. This ongoing trend indicates a diminishing interest in Ethereum among institutional investors, especially when contrasted with inflows seen for altcoins like XRP.
Bitcoin and Blockchain Equities Also Affected
While Ethereum has been facing a lack of institutional investor interest, it is not the only major cryptocurrency experiencing significant outflows. Bitcoin, once again, witnessed the largest outflow volumes for the week, with $69 million leaving Bitcoin funds. In contrast, short Bitcoin saw a 5-month high weekly inflow of $15 million. Blockchain equities also suffered from another week of outflows, totaling $10.8 million. Overall, the outflows from crypto and blockchain-related funds have reached a staggering $294 million, which accounts for 0.9% of the total assets under management. This negative sentiment exhibited by institutional investors is further reflected in the substantial decline in trading volumes. CoinShares reported that trading volumes reached just $754 million last week, marking a significant 73% drop compared to the previous week.
A Glimpse of Hope
Despite the prevailing bearish sentiment and the recent decline in trading volumes, there seems to be a glimmer of hope for the top assets this week. Both Bitcoin and Ethereum have witnessed a notable increase in trading volumes on crypto exchanges, with Bitcoin experiencing a jump of 96.28% and Ethereum seeing a rise of 41.16%. This surge in trading volumes could potentially indicate a forthcoming reversal of the bearish trend that plagued the market over the weekend.
Institutional investors have shown a growing aversion towards Ethereum, as reflected in the continuous outflows from Ethereum funds. This decline in interest has caused Ethereum’s assets under management to decline at a faster rate compared to other cryptocurrencies. Furthermore, Bitcoin and blockchain equities have also faced significant outflows, showcasing a general bearish sentiment among institutional investors. However, there is a glimmer of hope for the market as Bitcoin and Ethereum experience a surge in trading volumes, potentially signaling a reversal of the recent negative trend. As the crypto market continues to evolve, it remains essential for investors to monitor these institutional activities closely in order to make informed decisions.
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