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Record $141M outflow from Bitcoin products signals institutions are bearish

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After sharp price declines throughout May spoiled the mood of the world’s largest cryptocurrency players, Bitcoin-focused investment funds suffered from record buybacks by investors last week. Institutional investors have withdrawn more than $ 141 million from Bitcoin-based investment products over the past week, according to CoinShares. This amount became the maximum in one week, considering the entire history of the currency. The value is equivalent to 8.3% of net inflows to such funds in 2021.

A report from the investment company indicates that trading volume in instruments based on the main cryptocurrency in early June decreased by 62%, compared with the average trading activity in May. This speaks of investor caution. This has also been seen in credible cryptocurrency exchanges, where trading activity has halved.

Blockchain data provider Glassnode has also confirmed a slowdown in the Bitcoin market. During the recent sell-off, the number of active addresses on the Bitcoin network dropped 18% from recent highs of around 940,000, Glassnode reported.

As the CoinShares report showed, the majority of investors were in negative sentiment. However, some analysts have speculated that there are emerging signs that the worst has already passed. As investors diversify in the crypto space.

Investors have shown interest in alternative cryptocurrencies

Investors have shown interest in funds targeting alternative cryptocurrencies. According to the latest weekly digital asset report published by CoinShares, altcoin-related investment products raised $ 48 million last week. Investors have increased their investments in products based on Ethereum (+ $ 33 million), Ripple (+ $ 7 million) and Cardano (+ $ 4.5 million).

Thus, the decline in demand for BTC again coincided with an increase in institutional appetite for Ethereum. For the first time, an increase in the trading volume of investment products in Ethereum compared to Bitcoin we noted in the month of May.

According to CoinMarketCap, the volume of Ether (ETH) traded on crypto markets has exceeded $ 38 billion over the past 24 hours. In comparison, Bitcoin’s 24-hour trading volume was $ 32.9 billion. So, most likely, the outflow of funds from Bitcoin funds will continue. If the trend doesn’t change in the near future.

Bitcoin is the least attractive asset for institutional investors?

Since the beginning of 2021, more than $ 4.2 billion have been invested in Bitcoin-based products. At the beginning of June, investments in digital coin-based instruments account for 65% of the total amount of capital locked in cryptocurrency investment products.

Bitcoin is the least attractive asset for institutional investors, Goldman Sachs said. The bank held two roundtables, which attended 25 investment directors of hedge funds and funds working only with long positions. 35% of survey participants named Bitcoin as the least attractive asset.

Over the past day, the main cryptocurrency has fallen in price by 10%, to $ 32.3 thousand. This happened after the US authorities returned 63.7 Bitcoins worth about $ 2.3 million. Which were paid by the Colonial Pipeline pipeline company as a ransom to hackers. At the time of writing, Bitcoin is trading at $ 32.8K.