recovery? Institutional Crypto Funds See First Inflows in 5 Weeks

After five straight weeks of outflows, institutional investment has finally flowed back into crypto funds, with Bitcoin becoming the asset of choice while ETH is falling out of favor.

In its weekly report on digital asset fund flows published on Jan. 24, cryptocurrency investment firm CoinShares observed inflows into some institutional products.

It was the first net inflow in five weeks, with $14.4 million re-entering the sector as investors bought the dip.

These inflows came during a period of apparent price weakness, the researchers reported, adding that it suggested investors were "viewing this as a buying opportunity" at current price levels.

Capital continued to flow out of BTC funds under CoinShares, however, 21Shares and ProShares saw small gains. Most of the money has flowed into bitcoin, with $13.8 million inflows over the past week. Ethereum was the biggest loser during this period with an outflow of $15.6 million, but multi-asset products made up the difference, leading to overall net inflows.

CoinShares observed that Ethereum’s current seven-week streak of outflows totals $245 million, “underscoring that investors’ recent bearish sentiment has been largely focused on Ethereum rather than Bitcoin.”

Analyst Willy Woo also said it was an early sign that institutional funds were starting to come back:

There are early signs that institutional money is starting to return to the market.

— Willy Woo (@woonomic) January 24, 2022

However, the funds included in the report had total AUM of $51 billion, the lowest since early August 2021. Assets under management have been depressed over the past few months as the value of the underlying assets has declined.

Analysts and traders are looking for entry points after Bitcoin rallied and reclaimed $36,000, Cointelegraph reported.

Bitcoin fell to a six-month low of $33,000 late Monday, but has since bounced back steadily, returning 10% to $36,276 as of writing, according to Tradingview. If spot market momentum continues in this direction, weekly institutional inflows may follow.

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