Coinshares: Inflows Into Digital Asset Products Reach $1.2 Billion

September 30, 2024 Bitcoin.com

CoinShares’ Butterfill suggests ‘continued hesitancy’ among investors

October 4, 2022 Coin Telegraph

Matrixport's head of strategy said he believes the market is currently in a "wait-and-see environment" but could shift after the U.S. mid-term elections in November.

Minor inflows for digital asset investment products over the last few weeks suggest a “continued hesitancy” towards crypto amongst institutional investors amid a slowdown of the U.S. economy.

In the latest edition of CoinShares’ weekly “Digital Asset Fund Flows” report, Coinshares head of research James Butterfill highlighted stand-offish institutional sentiment towards crypto investment products, which saw "minor inflows" for the third week in a row.

“The flows remain low implying continued hesitancy amongst investors, this is highlighted in investment product trading volumes which were US$886m for the week, the lowest since October 2020.”

Between Sept. 26 and Sept. 30, investment products offering exposure to Bitcoin (BTC) saw the most inflows at just $7.7 million, with Ether (ETH) investment products close behind with $5.6 million worth of inflows. Short BTC products represented the only other notable inflows of $2.1 million.

These inflows were offset by more than $3.5 million worth of outflows for investment products offering exposure to altcoins such as Polygon (MATIC), Avalanche and Cardano (ADA), while multi-asset and Solana funds also shed $700,000 and $400,000 during that week.

Commenting on the current state of the crypto market, and the institutional outlook of late, Markus Thielen, head of research and strategy at Singapore-based crypto financial services platform Matrixport noted that:

“The market is currently in a wait-and-see environment whereas a potential positive shift after the US Mid-Term elections could have significant regulatory changes.”

“Last night’s US economic data, notably the ISM index, showed that growth has materially slowed down in the US economy and there is now the possibility that the Fed will become less hawkish. The USD rally appears to have lost one of its key drivers and this could signal a pause in rate hikes. This could be very bullish for digital assets into year-end,” he added.

Looking at the month-to-date (MTD) flows as of Sept. 30, ETH products have been the most offloaded by institutional investors despite the Merge going through on Sept. 15, with $65.1 million worth of outflows.

“Looking back, the Merge was not good for sentiment with outflows totaling US$65m in September. Increased regulatory scrutiny and a strong US Dollar being the likely culprits as the shift to Proof of Stake was executed successfully,” said Butterfill.

In contrast, Short BTC funds and BTC investment products saw minor inflows of $15.2 million and $3.2 million MTD.

Crypto ETF outflows slowing

While there has been limited action of late for crypto investment products tracked by CoinShares, Bloomberg Intelligence has observed a notable trend in crypto exchange-traded funds (ETFs).

According to Bloomberg Intelligence data, institutional investors offloaded $17.6 million from crypto ETFs during Q3 2022, providing a stark contrast to the “record $683.4 million withdrawn from such funds” in Q2 2022.

“The outflows mainly took place in the past two months. In July, investors poured upwards of $200 million into crypto ETFs,” Bloomberg noted in a Sept. 30 article, adding that the decreased outflows was likely due to “narrow fluctuations” in crypto prices during Q3.

Almost $100M exits US crypto funds in anticipation of hawkish monetary policy

June 14, 2022 Coin Telegraph

Almost 0M exits US crypto funds in anticipation of hawkish monetary policy

Bitcoin

“What has pushed Bitcoin into a “crypto winter” over the last six months can by and large be explained as a direct result of an increasingly hawkish rhetoric from the US Federal Reserve,” CoinShares wrote.

Institutional investors offloaded $101.5 million worth of digital asset products last week in ‘anticipation of hawkish monetary policy’ from the U.S. Federal Reserve according to CoinShares.

U.S. inflation rates hit 8.6% year-on-year at the end of May, marking a return to levels not seen since 1981. As a result, the market is expecting the Fed to take considerable action to reel in inflation, with some traders pricing in three more 0.5% rate hikes by October.

According to the latest edition of CoinShares’ weekly Digital Asset Fund Flows report, the outflows between June 6 and June 10 were primarily led by investors from the Americas at $98 million, while Europe accounted for just $2 million.

Products offering exposure to crypto’s top two assets, Bitcoin (BTC) and Ethereum (ETH), accounted for nearly all outflows at $56.8 million and $40.7 million a piece. The month-to-date figures also paint a grim figure at $91.1 million worth of outflows for BTC products and $72.3 million in total outflows for ETH products.

“What has pushed Bitcoin into a “crypto winter” over the last six months can by and large be explained as a direct result of an increasingly hawkish rhetoric from the US Federal Reserve.”

While CoinShares suggested that Bitcoin has been pushed into a crypto winter, the year-to-date (YTD) inflows for BTC investment products still stand at $450.8 million. In comparison, funds offering exposure to ETH have seen hefty YTD outflows of $386.5 million, suggesting the sentiment amongst institutional investors still heavily favors digital gold.

The report also highlighted that the total assets under management (AUM) for Ether funds have “fallen from its peak of US$23bn in November 2021 to US$8.7bn” as of last week.

Notably, it appears that the institutional investors offloaded their BTC and ETH products before most of the latest price carnage happened to both assets.

According to data from CoinGecko, between June 6 and June 10, the price of BTC and ETH dropped 4.7% and 5.9% each. However, since June 11, BTC and ETH have plunged around 25.7% and 33.2% respectively.

Apart from BTC and ETH outflows, multi-asset funds saw outflows of $4.7 million, and Short Bitcoin products posted minimal outflows of $200,000. At the same time, investors also “steered clear of adding to altcoin positions.”

Institutional crypto products eye record AUM as investors pile into Bitcoin

October 12, 2021 Coin Telegraph

Altcoins

Institutional investors piled $225 million into Bitcoin products while Ether products saw outflows of $13.6 million this past week.

Institutional investors are continuing to pile into Bitcoin despite prices pushing up to a five-month high.

According to CoinShares’ Oct. 12 Digital Asset Fund Flows Weekly report, more than $226 million in capital flowed to institutional Bitcoin (BTC) products this past week. Bitcoin products dominated inflows for the third consecutive week, posting a week-over-week increase of 227%.

The heavy inflows coincided with the price of BTC gaining 12.5% for the week, with BTC sitting at around $54,000 on Oct. 8.

CoinShares attributes the positive shift in sentiment towards Bitcoin to recent statements from U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler’s suggesting the long-awaited approval of the United States’ first Bitcoin exchange-traded fund (ETF) may be just around the corner.

The surging activity surrounding Bitcoin has seen the combined assets under management (AUM) of institutional crypto products push up to $66.7 billion last week — with CoinShares estimating the total is just 5% shy of the sector’s record AUM from May.

Products tracking altcoins have posted a mixed performance for the week, with Solana (SOL) and Cardano (ADA) products generating inflows of $12.5 million and $3 million respectively. However, funds offering exposure to Ether (ETH), Polkadot (DOT) and Ripple (XRP) suffered outflows of $13.6 million, $2.1 million and $600,000 each.

Crypto investment products have now posted inflows for eight weeks in a row.

Many onlookers are attributing BTC’s recent bullish momentum to expectations that the SEC will soon approve a futures-based Bitcoin ETF.

While the SEC has previously shot down every application it has received for physically-backed Bitcoin ETFs, the SEC is currently deliberating a four applications for exchange-traded funds based on the Chicago Mercantile Exchange's (CME) regulated futures contracts.

With CME’s futures markets offering a product that is already insured and overseen by U.S. regulators, pundits such as senior ETF analyst for Bloomberg Eric Balchunas believe that Bitcoin futures ETFs are “likely on schedule” to receive a regulatory green light this month.

Institutional investors bought the dip as China FUD broke

September 28, 2021 Coin Telegraph

Bitcoin

While institutional Bitcoin products have experienced outflows for 13 of the past 17 weeks, the sector has now seen three straight weeks of inflows.

Institutional investors were buying the dip on the back of China’s latest FUD, with digital asset investment products generating $95 million worth of inflows last week.

According to CoinShares’ Sept. 27 Digital Asset Fund Flows Weekly report, a surge in dip buying helped drive a sixth consecutive week of inflows for institutional crypto investment products broadly.

The $95 million worth of inflows between Sept. 20 and Sept. 24 marks a 126% weekly inflows increase. BTC and Ether investment products led the pack with $50.2 million and $28.9 million worth of inflows respectively.

While BTC investment products have seen outflows in 13 of the past 17 weeks, positive sentiment towards the asset rose during September as inflows were recorded for the past three weeks. Inflows to Bitcoin products also increased by 234% week-over-week.

Institutional appetites for altcoins appears to remain strong, with products tracking Solana (SOL), Cardano (ADA) and Polkadot (DOT) posting inflows of $3.9 million, $2.6 million and $2.4 million respectively. Multi-asset funds also saw inflows of $6.4 million this past week.

The great wall of FUD

On Sept. 24 the People’s Bank of China (PBoC) published a memo announcing a ban on all crypto transactions that triggered an 8% dip in the price of Bitcoin (BTC) along with a wider pullback across the crypto market.

The PBOC’s updated measures — which were initially published on Sept. 3 before it was picked up by western media outlets last week — outlined that financial institutions and payment firms are barred from providing any services related to crypto transactions.

While FUD from Chinese regulators has historically impacted crypto markets, it has also served as a catalyst for surging prices or bull runs in the subsequent months following the announcements.

In September of 2017, China’s government banned crypto exchanges from offering services to users in the country, while also barring citizens from participating in initial coin offers. Following the double-ban, the price of BTC made the historic climb from the $4,000 range to a then all-time high price of around $20,000.

Institutional exposure to altcoin products retests all-time high

September 7, 2021 Coin Telegraph

AUM

Inflows to Solana-based investment products saw a whopping 388% increase last week, with institutional investors gaining exposure to $13.2 million worth of SOL products.

Institutional demand for altcoin exposure has surged to record levels, with the altcoin market share now representing a record 35% of capital locked in crypto investment products.

According to CoinShares’ Sept. 7 Digital Asset Fund Flows Weekly report, nearly 40% of the past week's inflows to digital asset investment products were allocated t instruments tracking altcoins.

While $97.8 million was invested into crypto investment products combined between Aug. 30 and Sept. 3 to mark the sector’s third consecutive week of inflows, $38.9 million was invested into altcoin products.

This past week also saw a sizeable increase in institutional crypto investments, with the previous two weeks recording inflows of $24 million and $21 million respectively.

Roughly 35% of capital invested in institutional crypto investment products is currently locked in instruments tracking assets other than Bitcoin — comprising a retest of the metric’s all-time high from May.

Ethereum (ETH) tracking products led the altcoin pack for the second week in a row, recording inflows of $14.4 million, a 16.2% decrease from the previous week’s $17.2 million.

There was a whopping 388% spike in weekly inflows for Solana (SOL)-based products, with SOL products absorbing $13.2 million. This coincided with the price of SOL gaining 37% over the same period.

CoinShares highlighted that inflows to Solana products doubled year-to-date (YTD) this past week, with $25 million having been invested into SOL instruments during the entirety of 2021 so far. SOL-based products now represent $44 million in total assets under management (AUM).

Cardano (ADA) and Polkadot (DOT)-based funds also saw notable inflows of $6.5 million and $2.7 million respectively.

Bitcoin (BTC) investment products bucked an eight-week trend of outflows — the longest streak on record for any digital asset product — after enjoying inflows of $58.9 million for the week. Despite the bullish shift in momentum, BTC investment products have posted outflows for 14 of the past 17 weeks.

According to CoinShares estimates, institutional asset managers currently represent a total AUM of $62.5 billion combined — nearing the record high of $66 billion posted during mid-May.

Top institutional asset manager Grayscale continues to dominate the competition, representing 73% of the sector's combined AUM with $46.2 billion.

Record $141M outflow from Bitcoin products signals institutions are bearish on BTC: CoinShares

June 8, 2021 Coin Telegraph

Bitcoin

Institutional investors withdrew a record $141 million from Bitcoin investment products this past week.

The latest report from analytics firm CoinShares shows that outflows from institutional BTC investment products continue to surge.

According to CoinShares’ June 7 Digital Asset Fund Flows Weekly report, institutional investors are continuing to reduce Bitcoin exposure, with BTC investment products seeing a record outflow of $141 million this past week.

*Capital flows for crypto investment products: CoinShares*

The data follows heavy institutional selling amid May’s dramatic crypto market meltdown, with institutions having withdrawn nearly $100 million from crypto products between May 10 and May 16, before outflows briefly slowed towards the end of last month.

Trade volume for BTC products is also sharply declining, with the first week of June seeing a 62% drop in trade activity compared to May’s weekly average.

Despite describing institutional sentiment towards BTC as having turned bearish since early May, CoinShares highlighted the outflows represent less than one-tenth of 2021’s inflows:

“The outflows represent 8.3% of the net inflows seen this year and remain minimal on relative terms to the outflows seen in early 2018.”

Since the start of 2021, more than $4.2 billion in capital has flowed into Bitcoin products, with BTC current representing 65.9% of all capital locked in crypto investment products.

The declining institutional demand for BTC has again coincided with increasing institutional appetites for Ethereum — with Ether representing more than 26.8% of the combined assets under management (AUM) currently locked in crypto investment products after receiving inflows of $33 million this past week.

CoinShares also noted investors are seeking exposure to Ripple (XRP) and Cardano (ADA) investment products are attracting interest, with XRP’s inflows totaling $7 million — its largest weekly inflow since April — and ADA’s inflows tagging $4.5 million.

According to data from CoinGecko, Ether continues to have usurped Bitcoin’s status as the most-traded non-stablecoin crypto asset in the broader crypto markets.

Roughly $37.4 billion worth of Ether traded hands over the past 24 hours — second only to stablecoin Tether’s $75.5 billion in daily trade. By comparison, Bitcoin has processed $32.9 billion in 24-hour trade volume.

Institutional investors load up ETH, with its share of AUM hitting a new record

June 2, 2021 Coin Telegraph

Coin Telegraph

Institutional investors continue to exit BTC in favor of ETH, with Ether investment products now representing more than one-quarter of institutional crypto AUM.

Institutional demand for Ethereum continues to surge, with Ether products now representing more than one quarter of the assets under management (AUM) of crypto investment products.

According to CoinShares’ June 1 Digital Asset Fund Flows Weekly report, the past week saw significant institutional inflows of $74 million as investors sought to capitalize on the fall out from the recent crash in which many crypto assets lost more than 50% of their value.

More than 63% of institutional inflows were injected into Ether products, or $46.8 million of the total. Ether products now represent 27% of the combined AUM for crypto investment products — the highest share yet.

Significant inflows were also made to products offering exposure to multiple crypto assets ($11.1 million) as well as funds targeting Cardano ($5.2 million), XRP ($4.5 million), and Polkadot ($3.8 million).

Outflows from Bitcoin products have slowed, with roughly $4 million in capital exiting the markets — down from last week’s $110.9 million in outflows. Over the past three weeks, $246 million has exited BTC investment products.

Despite Bitcoin’s 30-day inflows of $47.9 million currently equating to roughly one-third of Ether’s $147.7 million, Bitcoin still dominates year-to-date inflows with nearly $4.4 billion compared to Ether’s $973 million.

However, Ether’s recent momentum has given rise to renewed speculation as to whether Ethereum is gearing up to flip Bitcoin, with Ethereum currently beating out crypto’s honeybadger by transaction count, volume, and fees, and trade volume.

According to CoinGecko, Ether is currently the second-most traded crypto asset with $38.8 billion in daily volume, ranking behind only Tether’s $103 billion. Roughly $32.9 worth of BTC changed hands over the past 24 hours.

crypto investment products

Crypto ETF outflows slowing

The great wall of FUD

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