Matrixport’s chief strategist said he believes the market is currently in a “wait and see environment,” but that could change after the US midterm elections in November.
Minor inflows of digital asset investment products in recent weeks suggest a “continued hesitancy” towards cryptocurrencies among institutional investors amid a slowdown in the US economy.
In the latest edition of CoinShares’ weekly “Digital Asset Fund Flows” report, CoinShares head of research James Butterfill highlighted muted institutional sentiment towards crypto investment products, which saw “lower inflows” for the third week in a row have got:
“Flows remain low, implying continued hesitation among investors, this is highlighted by investment product trading volumes that were US$886 million for the week, the lowest since October 2020.”
Between September 26th and 30th are investment products that provide exposure to Bitcoin
saw the most entries with just $7.7 million, with ether
Investment products follow closely with inflows worth $5.6 million. BTC shorts accounted for the only other notable inflows of $2.1 million.
These inflows were offset by more than $3.5 million in outflows from investment products that provide exposure to altcoins like Polygon.
for 14.92 US dollars
for 0.363 US dollars
, while Multiactive and Solana
the funds also have $700,000 and $400,000 during that week, respectively.
Markus Thielen, head of research and strategy at Matrixport, the Singapore-based crypto financial services platform, noted that:
“The market is currently in a wait-and-see environment, while a possible positive turn after the US mid-term elections will see significant regulatory changes.”
“Last night’s US economic data, especially the ISM index, showed that growth in the US economy has slowed considerably and there is now a chance that the Federal Reserve may become less aggressive. The USD rally appears to be one of has lost its key drivers and this could signal a pause in rate hikes. This could be very bullish for digital assets by the end of the year,” he added.
Looking at the month-to-date (MTD) flow from September 30, ETH products are the most downloaded by institutional investors despite the merger taking place on September 15, with $65.1 million in outflows.
“Looking back, the merger was not good for trust with exits totaling $65 million in September. More regulatory scrutiny and a strong US dollar are the likely culprits behind the successful move to proof-of-stake,” said Butterfill.
In contrast, BTC short funds and BTC investment products saw small inflows of $15.2 million and $3.2 million MTD.
Crypto ETF outflow extension
While there has been limited recent action for cryptocurrency investment products tracked by CoinShares, Bloomberg Intelligence has noted a notable trend in cryptocurrency exchange-traded funds (ETFs).
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According to data from Bloomberg Intelligence, institutional investors withdrew $17.6 million from crypto ETFs in the third quarter of 2022, which is in contrast to the “record $683.4 million withdrawn from such funds” in the second quarter of 2022. 2022.
“The departures occurred mainly in the last two months. In July, investors poured more than $200 million into crypto ETFs,” Bloomberg noted in a September 30 article, adding that the decline in the The outflow was likely due to “narrow fluctuations” in cryptocurrency prices over the period. third trimester.