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Institutional crypto funds see largest capital inflows for 3 months

March 29, 2022 Coin Telegraph

Bitcoin investment

The data from CoinShares shows a weekly inflow of $193 million, with more than half of that figure going to Bitcoin alone. Solana is also getting attention and broke a record in the process.

CoinShares data revealed on Tuesday that institutional investments into cryptocurrencies are at the highest levels in three months, a sharp rise from the previous week which saw outflows of $47 million.

The Digital Asset Fund Flows Weekly Report revealed that investment products for digital assets saw total inflows of $193 million last week, a level not seen since early December 2021.

The last time investment levels were near the current figure was in the week ending on Dec. 3, which saw $184 million worth of inflows.

The fund flows had a big focus on Bitcoin (BTC), with just over 50% of the capital going into products based on BTC, which saw inflows totaling $98 million.

Solana (SOL) was runner-up, seeing $87 million inflows for the week, a figure that CoinShares says is the “largest single week of inflows on record.” SOL-based funds now represent 36% of assets under management with institutional firms, the largest altcoin after Ether (ETH). ETH-based funds saw inflows last week totaling just $10.2 million.

Europe was the significant contributor, with firms seemingly bolstered by the news that the bill banning proof-of-work (PoW) mining did not pass. 76% of inflows, or about $147 million, came from the region last week

The figures from the report are in sharp contrast to the data the week prior, which saw $49.4 million withdrawn from BTC and ETH from mostly North American firms with concerns regarding increasing crypto regulations.

The inflows of cash by institutional firms correlate with the price of Bitcoin seeing a recent surge above $48,500 at one point. The same was true with Ether which broke out over $3,300.

Last week, executives from crypto firms Nexo and Amber Group discussed the ”exponential” growth of institutional investment into cryptocurrencies at the Blockchain Africa Conference 2022, saying that while there‘s an increase in institutional onboarding, there might still be barriers to entry. Kalin Metodiev, co-founder and managing partner at Nexo, said most firms may claim that the crypto market is “still too volatile.”

Bitcoin’s 30% recovery in two weeks has BTC whales back in accumulation mode

February 11, 2022 Coin Telegraph

Bitcoin

The number of Bitcoin addresses holding at least 1,000 BTC has risen in recent weeks.

Bitcoin (BTC) addresses holding at least 1,000 BTC, the so-called whales, have started accumulating more tokens during the recent market recovery. As of Feb. 10, the total supply in these addresses was 8.096 million BTC versus 7.95 million on Jan. 24, according to data from Coin Metrics.

Bitcoin whales and institutional inflows

The buying sentiment among the richest crypto investors picked momentum during Bitcoin's recovery in the past two weeks as BTC rebounded from its 2022 low of $33,000 on Jan. 24 to around $43,500 on Feb. 11.

*Bitcoin supply in addresses greater than 1,000 BTC. Source: Coin Metrics, Messari*

Small Bitcoin investors, addresses that hold less than 1 BTC, so-called "fishes," also joined the accumulation spree during the recent Bitcoin price rebound.

Meanwhile, data resource Ecoinometrics shows the Coin Metrics data in the form of clusters, showing a synchronous accumulation behavior among the Bitcoin whales and fishes.

Interestingly, the clusters looked the same as they did in the days leading up to BTC's record high of $69,000 in November 2021.

*Bitcoin on-chain divergence. Source: Coin Metrics, Ecoinometrics*

"Once more this cycle, this rebound in price correlates pretty well with both the small fish and the whales addresses buying simultaneously for an extended period of time, wrote Nick, the analyst at Ecoinometrics, in a note published Fed. 7, adding:

"I don't know if this signal is going to continue being predictive of a sustained rally, but hey, for now it is working fine."

A report published by CoinShares this week also showed a rise in inflow across crypto funds last week. Notably, the capital injections into these funds quadrupled to $85 billion, with $71 million flowing into Bitcoin-focused investment products, suggesting renewed institutional interest is also buoying BTC's price recovery.

*Net flows into digital assets as of Feb. 4, 2022. Source: CoinShares, Bloomberg*

"Right now it is just warming up"

Nick suggested that Bitcoin has enough room to grow its valuation in the coming months, citing a so-called "aggregated risk score," derived from four parameters that are: risk of overextended market, risk of low-demand, high-supply situation, risk of holders taking profits, and risk of increased selling pressure.

The outcome is represented in colors, with red and blue suggesting a hot and cool market, respectively. The hotter the market, the higher the selling pressure.

"Right now it is just warming up," the Ecoinometrics analyst said, adding that "in theory, there is no obstacle to the price rising much higher except for the lack of momentum."

*Bitcoin aggregated risk level. Source: Ecoinometrics*

BTC price levels to watch

Meanwhile, on-chain data tracking planform WhaleMap projected $46,200-$49,000 as Bitcoin's "current resistance range," citing higher trading activity inside the price area in the past.

Similarly, the firm noted that the $41,400-$42,400 range is now acting as support, as shown in the chart below.

*Bitcoin volume profile. Source: WhaleMap*

"Closest on-chain resistance according to whale accumulations is only at ~$47,000," it noted.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin has risen 7%–36% in the first week of January each year since 2018

December 31, 2021 Coin Telegraph

Coin Telegraph

Some analysts are expecting big things for Bitcoin shortly once institutional selling has subsided and capital gets deployed to the market.

Some crypto market analysts are highlighting the potential for a green first week on the crypto markets in January as part of what economist and trader Alex Krüger calls the “first week of the year effect.”

Krüger pointed out in a Wednesday tweet that for the past four years straight, Bitcoin (BTC) has enjoyed positive returns in the first week of January ranging from 7% to 36% between 2018 and 2021.

In 2021, BTC grew from $28,653 to $41,441 in the first week of January.

When asked what had happened in previous years, Krüger replied, “Tbf only 2020 and 2021 matter, different markets, so do with those two data points as you will.”

Still expect a strong crypto up market in early Jan driven by fund inflows. Then risk-off ahead of the next FOMC (Jan/26) if the next inflation print comes in too hot (Jan/12).
— Alex Krüger (@krugermacro) December 28, 2021

His optimistic outlook for early January comes from his expectation of strong “fund inflows,” which appears to be in line with the sentiments of Real Vision CEO Raoul Pal. Pal said in a YouTube interview on Monday that he believed the sell-offs on Bitcoin were finished and that January would have a strong start as institutional capital gets reinvested in the market.

ExoAlpha chief investment officer David Lifchitz believes institutions are still selling even with less than 24 hours remaining in 2021 in order to lock in tax losses. It’s possible that a January first week rebound could be correlated with the phenomenon.

Fintech and wealth management firm deVere Group CEO Nigel Green believes that December has shaped up as Bitcoin’s worst monthly showing since May of 2021 due to what he calls “panic sellers practically giving away their cryptocurrencies to wealthy buyers.”

He is bullish on the largest cryptocurrency by market capitalization for the long term, however. Green feels that Bitcoin can protect investors from global inflation and that “borderless, global, decentralized currencies are the future.”

Not everyone is bullish on crypto in 2022, however.

Carol Alexander, professor of finance at Sussex University, told CNBC that BTC could tank as far down as $10,000 in 2022. She is a skeptic, however, who believes that BTC has no fundamental value and that it has already reached its peak this cycle.

A more informed take comes from Todd Lowenstein, chief equity strategist of Union Bank. His view is that “Goldilocks conditions,” such as the COVID financial stimulus packages and low-interest rates that benefited high asset prices, are coming to an end, which will have a significant negative impact on BTC and traditional markets in 2022.

“Goldilocks conditions are ending and the liquidity tide is receding which will disproportionately harm overvalued asset classes and speculative areas of the market including cryptocurrencies.”

institutional investment