Throughout this year, institutional cryptocurrency investors have been steadily exiting the market, particularly due to the prevailing bearish sentiment. Nevertheless, Ethereum has endured a significantly more pronounced decline compared to other assets, as its outflows have exerted downward pressure on the total assets under management (AuM). This trend has emerged as Ethereum faces challenges following its descent below the critical support level of $1,600.
Institutional Investors Withdraw from Ethereum.
In its latest Digital Asset Fund Flows Weekly Report, alternative asset manager CoinShares has disclosed a growing reluctance among institutional investors when it comes to Ethereum.
This reluctance is evident in the substantial outflows spanning several months, which have led to a faster decline in Ethereum’s assets under management compared to other cryptocurrencies.
The outflow trend persisted into the past week, with a total of $4.8 million exiting Ethereum funds. According to CoinShares, this brings the year-to-date outflows for Ethereum to a total of $108 million. Notably, this figure accounts for 1.6% of Ethereum’s total assets under management, representing the highest percentage of outflows among all assets.
This trend highlights a diminishing interest in Ethereum from institutional investors, which becomes even more pronounced considering that altcoins like XRP experienced inflows of $0.7 million as investors moved away from Ethereum.
CoinShares concludes that this makes Ethereum “the least favored digital asset among ETP investors this year.”
Bitcoin is not excluded either.
While Ethereum has undeniably not garnered favor from institutional investors, it was not the sole major cryptocurrency grappling with outflows in the past week. Once again, Bitcoin experienced the highest outflow volumes, with $69 million exiting Bitcoin funds. Interestingly, short Bitcoin funds saw a weekly inflow of $15 million, reaching a 5-month high.
Additionally, blockchain equities faced another week of outflows, totaling $10.8 million. In total, this ongoing streak of outflows has led to a departure of $294 million from crypto and blockchain-related funds, accounting for 0.9% of the total assets under management.
This bearish sentiment among institutional investors is further emphasized by a significant decline in trading volumes. The asset manager reported that volumes were a mere $754 million for the previous week, marking a 73% decrease compared to the previous week’s figures.
Despite the negative sentiment observed last week, the current week appears to be more promising for top assets, as Bitcoin and Ethereum have witnessed a notable increase in trading volumes on crypto exchanges, with a 96.28% surge for Bitcoin and a 41.16% rise for Ethereum. This potential uptick could signify a forthcoming reversal after a turbulent weekend.