Institutional Investors Losing Interest in Ethereum
Institutional crypto investors have been withdrawing from the market, and Ethereum has been hit particularly hard. The bear market and a drop below the $1,600 support have contributed to significant outflows from Ethereum funds, causing a decline in total assets under management (AuM). CoinShares, an alternative asset manager, reported a growing aversion from institutional investors towards Ethereum, with outflows surpassing other crypto assets. Last week alone, $4.8 million flowed out of Ethereum funds, bringing the year-to-date outflows to $108 million. This represents 1.6% of Ethereum’s total AuM, the highest percentage of outflows for any asset. In contrast, altcoins like XRP saw inflows as investors withdrew from Ethereum. These outflows indicate a lack of interest in Ethereum among institutional investors.
Bitcoin and Blockchain Equities also Experience Outflows
While Ethereum faced significant outflows, Bitcoin also saw large volumes of funds leaving Bitcoin funds. Last week, $69 million flowed out of Bitcoin funds, while short Bitcoin experienced a 5-month high weekly inflow of $15 million. Additionally, blockchain equities suffered outflows, totaling $10.8 million. In total, the crypto and blockchain-related funds have seen $294 million leaving, accounting for 0.9% of the total assets under management. This bearish sentiment among institutional investors is reflected in declining trading volumes, which experienced a 73% drop from the previous week. However, this week shows signs of improvement as both Bitcoin and Ethereum have seen an increase in trading volumes on crypto exchanges, suggesting a potential reversal of the previous negativity.
Hot Take: Institutional Investors Shying Away from Ethereum
Institutional investors have been showing a lack of interest in Ethereum, as evidenced by significant outflows from Ethereum funds. With the bear market and a drop in price, Ethereum has experienced a decline in total assets under management. CoinShares’ report highlights that Ethereum is the least favored digital asset among ETP investors this year. This trend is in stark contrast to altcoins like XRP, which saw inflows as investors withdrew from Ethereum. Moreover, outflows were not limited to Ethereum alone, as Bitcoin also witnessed large volumes of funds leaving Bitcoin funds. The declining trading volumes and bearish sentiment among institutional investors reflect a cautious approach in the market. However, recent trading volume increases for Bitcoin and Ethereum on crypto exchanges may indicate a potential reversal in market sentiment.
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