Bear market triggers Bitcoin inflows from institutional investors

The market remains in disarray, with the price of bitcoin now in the low $30,000s(R 482K). This was preceded by a decline in market confidence, resulting in fewer inflows/more outflows in the previous several weeks. However, with the price now at its lowest point this year, institutional sentiment toward the digital asset has shifted, resulting in major inflows into the digital asset for the first time in weeks.

$45 million(R721M) is poured into Bitcoin

Following several weeks of outflows, Bitcoin is suddenly seeing inflows. The previous week was lucrative for the pioneer cryptocurrency, which witnessed inflows of up to $45 million(R721 M). It is a total 180-degree shift from institutional investors, who have been withdrawing funds from the digital asset to likely put towards their altcoin portfolios.

Naturally, these institutional investors withdrew when indicators pointed to a bear market, but they have now returned to seize their slice of the pie with bitcoin trading at low prices. It represents a revival of optimism among these investors.

Short Bitcoin has followed suit, riding the surge to its second-largest weekly inflows on record. The past week saw a total of $4 million(R64 M) come into Short Bitcoin, bringing its total asset under management (AuM) to a record high of $45 million(R721 M). Other digital asset investment products did not escape the flood of inflows. In an unexpected turnaround, $40 million(R640 M) was invested in digital asset investment products this time around.

Even if outflows were more prevalent last week, altcoins were not left out of this. However, Solana would deviate from the pack by becoming the only altcoin to register large inflows, with $1.9 million(R30 M) entering into the Digital asset.

Other altcoins are seeing outflows as negative sentiment continues to rattle the market. In one week, $12.5 million(R200 M) was removed from the digital asset. So far, 0.8 % of Ethereum AuM has left the digital asset, bringing the year-to-date outflows to $207 million(R3.3B). 

Inflows and outflows remained inconsistent across market regions. According to CoinShares data, investment items in North American markets totalled $66 million(R1.1B). Outflows dominated in Europe, with a total of $26 million(R416 M) exiting digital asset investment products in the region.

Nonetheless, the recent trend of institutional investments pouring into assets such as Bitcoin and Solana shows that institutional investors have emerged from the woodwork to take advantage of the market’s price weakness. Bitcoin’s price decline continues, with the cryptocurrency still unable to establish a support level above the $31,000(R496 K) mark.