Green Shoots? Institutional Crypto Funds See First Inflows in 5 Weeks

After about one month of continuous outflows, institutional investments are gradually flowing again into crypto funds. Presently, Bitcoin, the alternative cryptocurrency exchange, and Ethereum are no longer top funding alternatives for many investors. 

The Digital Asset Fund Flows, in its weekly report published on the 24th of January 2022 gave some insights. The report claimed that CoinShares, a crypto funding agency, took note of inflows for several institutional merchandise. 

This will be the first time more than a month the market will be witnessing an average positive influx of funds. So far, about $14.4 million has re-entered the market with investors shopping and purchasing gems during the dip. 

The researchers reported that this influx of funds re-entering the market is at a time of considerable price weakness. The researchers added that this inflow of funds translates to more investors seeing the current price levels as a buying opportunity. 

While CoinShares continue to experience an outflow of capital from personal Bitcoin funds, ProShares and 21Shares have registered a slight increase. A larger percentage of the fund inflow was for BTC which saw an influx of about $13.7 million.  On the other hand, Ethereum experienced an outflow of $15.5 million making it the biggest loser in the crypto sphere. However, Ethereum was able to record an average total inflow thanks to its wide range of assets products. 

CoinShares also took more than the current seven-week trend of Ethereum outflows is Jn the total of $245 million. This indicated that many of the bearish positions among investors and traders have been more about Ethereum than Bitcoin. 

Meanwhile, Willy Woo, a financial analyst, also argues that these indications are early signs that institutional funds are back. Therefore, investors should be ready to ride the bullish trend that may be influenced by the fund inflow. 

On the other hand, the report also suggests that the total asset management for the fund is around $51 billion. This is the lowest level it has been since August 2021. As a result of the continuous dip in the value of total assets in the past months, the AUM has since been depressed. So far, no significant change has also been recorded in the world's biggest fund, Grayscale. As of 25th of January 2021, Grayscale has an asset under management worth $30.6 million but according to the latest report, the fund had been selling and buying at a low cost of about 30%.  

According to Cointelegraph, traders and analysts are now on the look for clear entry indicators following BTC's reclamation and bounce to $36,000.

The market saw Bitcoin dip to its lowest price point of $33,000 in the last six months. However, the bulls actively buying more bitcoin saw its price surge by 10% which proved to return to $36,000. 

Presently, Bitcoin is trading for $38,000 a move further upward since touching $33,000. If the spot market should be able to maintain momentum, in the upward direction, more institutional inflows are bound to follow.

The Future of Bitcoin

Even with the recent volatility and price slumps experienced by Bitcoin, many financial analysts and experts are still very optimistic. Many still believe that the $100,000 price target is still a feasible goal for Bitcoin to reach before the end of the year. 

According to many analysts, the present Bitcoin's volatility and price dump is nothing new. Although investors still need to be careful when investing a fraction of their portfolio in crypto. 

Presently, bitcoin is showing a steady upward trend in the market since the dip to $33,000. Even though nothing is confirmed yet and many are still looking for market indicators to confirm a bullish trend, the hope is high among Bitcoin proponents. 

Unfortunately, the future price of Bitcoin is very difficult to predict as large digital coins are exposed to several market factors. However many experts still make predictions anyway. 

At the negative extreme, crypto skeptics predict that Bitcoin will fall to as low as $10,000 before the year ends. On the positive side, Bitcoin's proponents predict the coin would reach $100,000. But only time will tell.