The latest weekly digital asset fund flows from CoinShares shed light on the ongoing volatility among institutional investors when investing in altcoins such as XRP, Solana, and Cardano. Most of the incoming activity has gone into Bitcoin, but the report also highlights a diverse set of trends among altcoins to reflect the preferences and strategies investors are using across the wider crypto world. Elsewhere, Ethereum and Cardano ended the week with big outflows, while coins like XRP and Solana were bullish and attracting inflows.
XRP Entry, Cardano and ETH Exit
In accordance with CoinSharesDigital asset investment products saw total inflows of $321 million last week, bringing the trend to a second consecutive week. This interest, which was shown in the local price of many cryptocurrencies, was driven by the Federal Open Market Committee (FOMC) dDecision to reduce interest rates by 50bp last week. This has led to strong investment gains among investors especially in the United States. As a result, the amount of assets under crypto-currency management grew by 9%.
Bitcoin led the charge with a staggering $284 million inflows. However, what stood out was the simultaneous inflow of $5.1 million in short Bitcoin products. This indicates that some investors are still risking the downside.
On the contrary, Ethereum continued its outflow, reaching the fifth consecutive week. Continued outflows, driven mainly by the Grayscale Ethereum Trust, reached $28.5 million last week, bringing its monthly outflow to a significant $145.7 million.
Despite the influence of Ethereum in the altcoin market, the crypto-bearish sentiment among institutional investors fortunately failed to occur among other cryptocurrencies. XRP, for one, saw an inflow of $0.1 million last week, heralded by interest around the launch of Grayscale’s XRP trust. Similarly, Solana and Litecoin saw another week of steady inflows of $3.2 million and $0.1 million, respectively. Most notable among these were multi-asset investment products, which saw $54.2 million in inflows to effectively cancel out Ethereum. On the other hand, investment products based on Cardano were not so lucky, as they saw $0.2 million in outflows.
What’s Next for Institutional Investors?
Last week’s entry marks the beginning of what appears to be much more to come. This is because the crypto industry is very nascent enter the bullish phasewith the recent maintenance of many months it seems to be over.
Bitcoin, for example, looks important in a bull runsupported by key on-chain metrics and the possibility of a Fed interest rate cut. Interest among institutional investors is a key factor in this upcoming bull run, as large inflows from them will undoubtedly be accompanied by Bitcoin’s price. This will lead to corresponding inflows into altcoins, and ultimately we may see Ethereum begin to attract institutional inflows in the coming weeks.
The featured image was created with Dall.E, a chart from Tradingview.com