Crypto: Cascading outflows of institutional funds

Institutional funds specializing in cryptocurrencies continue to experience capital outflows for the fifth consecutive week, according to the latest report from CoinShares. With a release of $32 million last week, total releases are now at $232 million. Despite a decrease from previous weeks, institutional investors remain cautious about cryptos. Discover the reasons for this trend.

The exit trend persists

As the cryptocurrency market experiences a stagnant phase, with Bitcoin struggling to break above the $30,000 mark, investors are showing negative sentiment.

According to a report recent CoinShares report on crypto asset fund flows, crypto-focused investment funds see a slew of capital outflows for the fifth week in a row.

Between May 15 and May 19, these funds recorded an outflow of capital amounting to $32 million, bringing the total outflow to $232 million. Despite a slight drop from previous weeks, this trend is still causing some reluctance among institutional investors, according to James Butterfill, head of research at Coinshares.

Trading volumes were also down, hitting $900 million for the week, down 40% from this year’s average. This trend was also seen on centralized exchanges, where volumes hit their lowest level since late 2020, amounting to $20 billion for the week.

This outflow trend continues, with Bitcoin funds seeing the highest number of outflows, amounting to $33 million. In comparison, Ethereum funds saw smaller outflows, with just $1 million.

Geographic preferences of investors

Regarding the geographical distribution of outflows, Germany ranks first with $24 million, accounting for 73% of the total. Swiss-based institutional funds also recorded outflows amounting to $3.3 million.

These releases coincided with the approval of European cryptocurrency legislation, the MiCA. Separately, US funds saw an outflow of $5.5 million, while crypto-backing Canada saw an inflow of $2.2 million.

During the five-week period from April 21 to May 19, the price of bitcoin saw a drop of around 4.8% to stabilize at $26,842. Right now, at the time of writing, the price of BTC stands at $27,309, according to data provided by CoinMarketCap.

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