Institutional Investors Have Withdrawn $329 Million From Crypto Funds Since April

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Investors withdrew $62 million from crypto funds last week, bringing the seven-week draw down to $329 million, according to a report from Coinshares on Monday.

Assets under management, or AUM, fell 1% last week. These pullbacks were prompted by an increase in the number of investors cashing in on short positions after prices surged 56% across various cryptocurrencies over the past year, according to Coinshares.

CoinShares tracks the flow of money in and out of exchange-traded products, mutual funds, and over-the-counter (OTC) trusts that track crypto assets like Bitcoin, Ethereum, and altcoins.

The largest outflows were seen on the Tron blockchain, which saw $51 million withdrawn last week, or about 70% of total assets under management. However, CoinShares head of research James Butterfill wrote that the reason for this may have been a withdrawal of seed capital rather than “something more concerning.”

Bitcoin funds took a lesser hit with $2.7 million withdrawn last week, but the more volatile short bitcoin saw $6.3 million outflows. When investors short Bitcoin, they sell the token when the price is high to make a profit rather than hold it, in the hope that it can be bought later at a lower price. Bitcoin short funds do just that, allowing investors to buy stocks without opening the futures contracts themselves.

Selling of short Bitcoin funds was weaker overall, but accounted for around 44% of all outflows among AUMs, compared to just 0.9% for long Bitcoin funds, according to the report.

Ethereum funds meanwhile saw $2.7 million in outflows last week. Weekly deposits for XRP, Polygon, and multi-asset funds totaled around $1.6 million.

Despite weeks of back-to-back declines, the market doesn’t seem to be heading in any wayward direction.

In a sign that investors were still showing an appetite for digital assets, Coinbase announced last week that it would launch institutional-sized Bitcoin and Ethereum tracked futures for its institutional clients.

These derivatives, sized at 1 BTC and 10 ETH per contract, are priced based on the expected future price of digital assets. Despite a decline in trading, Bitcoin and Ethereum have seen their prices increase by more than 50% in the past year, according to CoinMarketCap.

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