Bitcoin and Ethereum Experience Institutional Outflows Despite Rising Prices
A recent report from CoinShares reveals that despite the rising prices of cryptocurrencies, institutions continue to sell off their holdings. Bitcoin (BTC) has seen the most significant outflows, with 85% of all institutional activity accounting for $45 million worth of sales. On the other hand, Ethereum (ETH) has also experienced negative streaks, with $4.8 million in sales by large entities over the past week and $117 million in outflows this year.
This trend has surprised James Butterfill, head of research for CoinShares, who noted that despite Ethereum’s attractive investment fundamentals and high demand for staking yield, it remains of lesser interest to institutions.
According to Butterfill, fund flows can sometimes serve as a contrarian indicator. This is evident in the case of Bitcoin and Ethereum, which have both seen price increases but continue to be sold off by institutions.
End of the Capitulation Phase?
The rising prices and substantial outflows may suggest that we are approaching the end of the capitulation phase. Over the past seven days, large entities have offloaded $53 million worth of crypto, totaling $455 million over the last nine weeks. The United States has led the way in terms of outflows, accounting for 77% ($41 million) of the total. Germany and Canada follow behind with $5.9 million and $4.9 million in outflows respectively.
In addition to the outflows, CoinShares also reported a 42% increase in trading volumes over the past week, reaching $1 billion.
Hot Take: Institutions Remain Bearish Despite Crypto Price Rises
Despite the positive price movements in cryptocurrencies like Bitcoin and Ethereum, institutional investors are still selling off their holdings. Bitcoin continues to be the most sold digital asset, while Ethereum remains on a negative streak. These outflows are surprising given the attractive investment fundamentals and high demand for staking yield in Ethereum. The rising prices and significant outflows may indicate that we are nearing the end of the capitulation phase. However, it remains to be seen whether institutions will regain interest in these cryptocurrencies in the future.
Sources: CoinShares, James Butterfill, CoinGecko
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