Crypto Inflows Reach October 2021 Highs
The money flowing into crypto investment products has been positive for 10 consecutive weeks, with a total inflow of $1.76 billion. According to data from CoinShares, there were inflows of $176 million in the past week for digital asset products. These investment vehicles are important for institutional and big investors to gain exposure to crypto without direct custody.
The inflows have reached their highest level since October 2021 when the market was near its peak due to the hype of the Bitcoin Futures ETF. Additionally, the total assets under management (AuM) of digital asset investment products grew by over 107% in 2023, with the past 10 weeks’ inflows contributing 4% to the total AuM.
Time to Practice Caution?
The spectacular growth in crypto inflows coincides with a period of increasing greed in the market. Mainstream media outlets like Bloomberg have predicted a Bitcoin supercycle and a price surge up to $500,000. However, investors should be cautious when the Fear and Greed index is in the “Greed” territory, as markets may start to pull back during extreme greed sentiment.
One Twitter user urged caution, pointing out that such optimistic predictions from mainstream media often occur at market peaks and can be red flags.
Hot Take: Be Cautious Amidst Crypto Inflows
The continuous positive inflows into crypto investment products indicate growing interest and confidence in the market. However, it’s essential to exercise caution when sentiment turns overly greedy. As mainstream media makes bold predictions about Bitcoin’s future and price targets, it’s crucial to remember that these headlines often coincide with market tops. Stay informed, monitor market indicators like the Fear and Greed index, and make informed investment decisions to navigate the crypto landscape effectively.
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