In the latest update from CoinShares, a European cryptocurrency investment firm, data indicates a slight reduction in institutional interest in Bitcoin investment products, with outflows totaling $24.7 million in the past week. The report, titled “Digital Asset Fund Flows Weekly” and released on January 22, points to a trend of decreasing Bitcoin exposure among institutional investors.
The outflows coincide with a tumultuous period in the crypto market, marked by a sell-off triggered by a spot Bitcoin exchange-traded fund (ETF). Between January 11 and 19, institutions withdrew nearly $21 million from crypto products, with a temporary slowdown in outflows towards the end of the week.
Interestingly, the report highlights a significant increase in trade volume for ETF products, reaching $11.8 billion in the last week. This surge represents 63% of all Bitcoin volumes on reputable exchanges, emphasizing the dominance of exchange-traded product activity in overall trading.
Despite minor outflows from digital asset investment products, CoinShares underscores a noteworthy shift in the U.S. market. Higher-cost spot issuers experienced substantial outflows amounting to $2.9 billion, while new ETFs garnered $4.13 billion in inflows since their launch.
James Butterfill, Head of Research at CoinShares, noted, “Incumbent, higher cost issuers suffered in the U.S., seeing U.S. $2.9bn of outflows, while newly issued ETFs have now seen a total of US$4.13bn inflows since launch.” The report also highlighted investor response to recent price weakness, with $13 million flowing into short-Bitcoin investment products.
The report sheds light on the broader market dynamics, indicating not only a decline in institutional demand for BTC but also a waning interest in Ether, which experienced outflows of $13.6 million in the past week. As a result, the cryptocurrency sector witnessed a 3.4% drop in total market capitalization over the last 24 hours, settling at $1.59 trillion.
