CoinShares researchers found that institutional investors have withdrawn a record amount of capital from BTC-focused funds over the past seven days. The company’s report says that the outflow amounted to $ 98 million for the week, which is almost $ 100 million.
At the same time, products focused on other cryptocurrencies, on the contrary, continued to attract funds within the so-called “altseason”.
Institutionals began to leave Bitcoin in anticipation of a large-scale market rollback. Provoked by the famous post of Elon Musk about the suspension of BTC acceptance by Tesla.
In 2021, major players invested about $ 5.6 billion in crypto funds. If BTC stagnates or continues to lose ground, then most likely this week the outflow of capital from cryptocurrency-oriented products will increase, CoinShares analysts predict. The churn shows how quickly some investors retreated as Bitcoin began a price pullback that has now increased to 35% from its April high.
Now we are seeing a diversification of the portfolio of institutions that have decided to bet on altcoins. For example, the inflow of funds into Ethereum products rose to $ 27 million last week.
For the first time in May, there was a trend in which Ether receives more capital compared to Bitcoin. Over the week, the volume of trades in ETH products increased to $ 4.1 billion. While the volume of transactions with BTC in the same market amounted to $ 3.1 billion.
The researchers’ report notes an influx of funds into other currencies, the most popular of which are Cardano and Polkadot. The inflow to these assets amounted to $ 6 million and $ 3.3 million, respectively”.
Rotation of BTC on ETH
What is happening now is different from trends seen in the past. The percentage balance of BTC and ETH on exchanges has been steadily declining, which has led to a rise in the prices of both assets since the beginning of 2021. However, the change in trader sentiment and the change in the correlation between the two assets led to a trend shift from the third week of April 2021.
As HODLer’s efforts on the ETH side increase, Bitcoin is under intense pressure from sellers, and it has been steadily increasing since the model change. In the short term, this is bullish for ETH. However, if the trend reverses, a sell-off in ETH could have a negative impact on the end-2021 price target. The rotation of BTC ETH changes the ROI in multiple portfolios as more ETH HODLers are profitable and the number of buyers, unique wallet addresses, is growing.
The number of addresses has been steadily increasing since 2021, which is another positive signal. In addition, in the case of ETH, the concentration of large HODL participants is 41%. This has decreased, however, this could be a sign that more retail traders are entering the ETH market.
The concentration of BTC among large HODL players is 12%. The asset almost largely concentrated in the hands of retail traders, in contrast to the top altcoins and ETH.
This also contradicts the widespread belief among traders that Bitcoin concentrated in whale wallets and institutions.
Overall, the cryptocurrency space remains a highly speculative environment, with investor apprehension likely stemming from a much broader range of motives. You can guess for a long time without finding the truth.