Institutional inflows into crypto hit lowest levels since October

March 29, 2021 Coin Telegraph

Managers bought $21 million worth of digital asset investment products last week, according to CoinShares. On a market-cap adjusted basis, Ether remains the most popular investment.

Capital flows into cryptocurrency investment products rose again last week, though the pace of growth has slowed since the start of the year, possibly marking a local top in institutional demand.

Net inflows totaled $21 million for the week ending March 27, according to CoinShares, a European digital asset manager. That was the lowest level since October 2020 when Bitcoin (BTC) was trading sub-$14,000.

Coupled with low investment volumes, investor appetite for crypto assets appears to have waned. The decline coincided with the lackluster price performance of major assets like Bitcoin and Ether (ETH), which have been unable to test new highs in recent weeks. Daily trade volumes for digital asset products fell to $788 million last week, compared with $900 million for the whole of 2021.

CoinShares noted that profit-taking was also in play, as investors sitting on large unrealized gains decided to take some off the table.

“We have recently witnessed a significant reduction in inflows and in some cases outflows, for the larger and longer established pre-2016 investment products,” the asset manager said, adding:

“We believe this is due to investors sitting on multi-year gains taking profits.”

Although Bitcoin investment products generated nearly half of the total weekly inflows, on a market capitalization-adjusted basis, Ether products were the most popular. Inflows into ETH investment funds rose by $5.4 million last week.

Total inflows increased for 21Shares and the Purpose exchange-traded fund but declined for CoinShares and virtually flatlined for Grayscale.

Despite the modest pullback in inflows, institutional investors remain a driving force behind the cryptocurrency bull market. As CoinShares reported last week, crypto assets held by institutional investment managers have topped $57 billion. And while Bitcoin and Ether continue to trade below all-time highs, the total cryptocurrency market capitalization rose to near-record levels on Monday. The total crypto market cap peaked just north of $1.83 trillion, according to CoinMarketCap.

Bitcoin buyers mean business as Coinbase reserves drop $8B in 3 months

March 26, 2021 Coin Telegraph

Bitcoin

Demand for Bitcoin remains solid and is fuelling a "supply shock" that shows no sign of abating, even at $50,000 and higher.

Bitcoin (BTC) may have shed $10,000 in a week but the cryptocurrency's "supply crisis" is more real than ever.

According to the latest data from on-chain monitoring resource Glassnode, exchange BTC reserves are at an all-time low.

Everyone wants BTC

In a telling depiction of investor strategy, exchange reserves have plummeted in recent months — and have continued dropping despite mixed price action.

Hodlers, it seems, want to hodl rather than trade or sell, even at all-time highs above $60,000.

At Coinbase, the largest U.S. exchange by volume, BTC stocks have crashed by nearly $8 billion at current prices, or 150,000 BTC, since January.

A favorite venue for largescale institutional buyers, Coinbase underscores persisting appetite for Bitcoin, Cointelegraph previously reporting on large tranches of BTC leaving its books for cold storage.

*Coinbase BTC balance chart. Source: Bybt*

"IMO what's happening is US institutions and HNWI are scooping up the available coins from weak hands and locking it up as strong HODLers in response to monetary inflation," statistician Willy Woo commented last week.

"Coinbase BTC supply dropping off a cliff suggests US institutional buying there."

Woo added that these "strong" hands had been buying up the supply put on the market during every price correction over the past year, with "insanely bullish" results.

*Major exchange BTC balance chart. Source: Glassnode*

GBTC faces unlocking at 14% discount

For asset manager Grayscale, however, conditions remained mixed as its signature Grayscale Bitcoin Trust ($GBTC) traded at a 14% discount to spot price this week.

Near-record highs, the discount in the "GBTC premium" is likely down to liquidity unlocking for those who bought shares six months ago.

At that time, a GBTC share cost around $11.17, equating to a positive premium of around 12% over spot price. Now, even with the negative premium, a share is $44.50.

*GBTC share price vs. holdings vs. premium chart. Source: Bybt*

Grayscale faces stiff competition from new institutional investment vehicles, with NYDIG this week slashing fees as Morgan Stanley prepares to offer one of its funds to its own investors.

NYDIG cuts Bitcoin fee to 0.3% for investors as Morgan Stanley opens floodgates

March 24, 2021 Coin Telegraph

Bitcoin

Competition among institutional Bitcoin services continues to heat up as fees are slashed in time for a fresh herd of investors entering.

Bitcoin (BTC) institutional investment firm NYDIG has staged an abrupt price cut for investors using it to gain exposure to BTC price action.

In a press release on March 24, the company confirmed that effective immediately, its access fee had been reduced to 0.3%.

Bitcoin buyers pick their premium

The move comes just days after NYDIG's FS Select NYDIG Bitcoin Fund became one of three products selected by Morgan Stanley to be offered to its wealthy institutional clients.

A potentially timely maneuver, the fee reduction may have consequences for competitors, notably the Grayscale Bitcoin Trust (GBTC), management fees for which currently cost clients 2%.

"NYDIG's new pricing structure is 50-75% lower than comparable passive bitcoin access products available to investors and, critically, 0.30% represents the true total expense ratio of the fund, including a Big-4 audit and legal, custody, and accounting fees," the press release claims

As Cointelegraph reported, competition from newcomers forms one explanation as to why GBTC's premium — how much extra clients pay for Bitcoin exposure on top of the net asset value price — has fallen into record negative territory this year.

At one point, the premium offered a 15% discount to spot price for shares in GBTC. As of March 16, the most recent date for which data is available, it had recovered to around -5.3%.

*GBTC premium vs. BTC/USD vs. Grayscale holdings chart. Source: Bybt*

Undercutting gold access

Continuing, NYDIG executives built on the sense of anticipation, which CEO Robby Gutmann had established in a recent interview. Prior to the Morgan Stanley announcement, Gutmann had revealed that the coming weeks would see a slew of "game-changing" adoption moves from the institutional sphere.

"Expenses matter, and this will not be our last fee reduction," founder and executive chairman Ross Stevens commented in the release.

"Further, as bitcoin's sound money advantages are more widely understood, I believe it is only a matter of time until U.S. dollar depreciation causes bitcoin's market cap to surpass that of gold, so it is fittingly symbolic that NYDIG has now made the total cost of bitcoin access 25% lower than the total cost of gold access."

Gold has seen further slights from investors this week, as CNBC host Jim Cramer conceded that the precious metal's performance had "disappointed" him. Bitcoin, on the other hand, had made him "a ton of money," he said.

Institutional managers hold a record $57B worth of crypto, according to CoinShares

March 23, 2021 Coin Telegraph

Institutional managers hold a record B worth of crypto, according to CoinShares

Coin Telegraph

Inflows into Grayscale products continue to surge, according to CoinShares data. Bitcoin remains the preferred asset for institutional investors.

Inflows into cryptocurrency investment products topped $57 billion last week, marking a new all-time high and underscoring the rapid adoption of digital assets underway among institutions.

In its weekly inflows report, digital asset manager CoinShares, said net inflows into digital asset investment products rose by $99 million for the week ended Mar. 19. Grayscale generated $9.1 million of inflows, bringing its year-to-date total to $2.373 billion. Flows into CoinShares declined by $25.9 million from the previous week. Year-to-date flows have declined by $93 million.

Grayscale is by far the world’s largest digital asset manager, with $44.2 billion in assets under management as of March 22.

03/22/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $44.2 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $ZEC $BAT $LINK $MANA $FIL $LPT pic.twitter.com/q6krycE3zi
— Grayscale (@Grayscale) March 22, 2021

With the exception of Ripple, all major assets tracked by CoinShares recorded weekly inflows, with $85.3 million flowing into Bitcoin (BTC). Interestingly, Bitcoin investment product trade volumes moderated to $713 million per day last week, down from the $1.1 billion average so far this year.

Inflows into Ethereum (ETH) products increased by $7.8 million. Multi-asset funds generated $4.2 million.

The CoinShares report highlighted a regional divide in institutional demand, with the United States seeing a decline in appetite while Europe and Canada reporting gains. Canada has become a hotbed for Bitcoin exchange-traded funds, with the Purpose Bitcoin ETF seeing $100 million in volume shortly after launching in February. The fund is expected to surpass all other ETFs in Canada within two months.

Institutions have become a major driving force of the crypto bull market, possibly setting the stage for a more prolonged rally than the retail-driven euphoria of 2017. Bitcoin’s price topped $61,000 last week, with one prominent BTC miner forecasting a top in the range of $150,000 to $300,000.

Institutional crypto managers report record AUM despite U.S. inflows plummeting

March 23, 2021 Coin Telegraph

Bitcoin

Institutional inflows have declined 59% this past week, but AUM is at an all-time high.

According to digital asset investment manager, CoinShares, institutional demand in the U.S. has declined slightly however European funds are still buying.

According to Coinshares’ March 22 Fund Flows Weekly report, combined flows into institutional crypto products totaled $99 million for the week ending March 20.

The data indicates a significant decline in institutional demand, with inflows down 59% from the previous week, which recorded $242 million.

However, the researchers noted that the assets under management figure for the top institutional investment products reached a record high of $57 billion.

The report added that while demand has declined in the U.S., institutions located in Europe and Canada continued buying last week.

Daily volumes for Bitcoin related products have also declined by around 35% to $713 million per day versus $1.1 billion per day on average for 2021. However, trading volumes remain steady at $11.8 billion per day.

Following strong Ethereum inflows during February, institutions appear to have again set their sights on Bitcoin, with $85 million entering BTC funds compared to just $8 million for ETH-based products last week. CoinShares noted that there was very little interest in Binance Coin, Ripple, and Bitcoin Cash-based products respectively.

Grayscale remains the market leader for institutional investment, with its total assets under management tagging $44.2 billion according to a March 23 tweet from the firm. Of that total, 84% has been invested in the firm’s Bitcoin Trust.

03/22/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $44.2 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $ZEC $BAT $LINK $MANA $FIL $LPT pic.twitter.com/q6krycE3zi
— Grayscale (@Grayscale) March 22, 2021

CoinShares’ own fund, which ranks second in terms of AUM with just under $5 billion, was the only institutional crypto manager to record an outflow for the week, losing $25.9 million. The Canadian 3iQ fund ranked third increased by $1.1 million to a total AUM of $1.7 billion.

At the time of writing, Bitcoin is continuing to correct after dropping 3.6% over the past 24 hours to trade at $54,850. Ethereum has lost 4% over the same period and is currently changing hands for roughly $1,700.

Crypto Giant Grayscale Boosts Five Altcoins, Launches New Crypto Products for Institutional Investors

March 20, 2021 The Daily Hodl

Grayscale

Everyone wants BTC

GBTC faces unlocking at 14% discount

Bitcoin buyers pick their premium

Undercutting gold access

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