We do the research, you get the alpha!
Bitcoin price volatility seems to have been a sale klaxon for institutional investors last week, some of which poured $299 million into exchange-traded Bitcoin funds, according to a new CoinShares report.
It’s an unprecedented level of bullish investment in Bitcoin funds during extreme market volatility, according to James Butterfill, CoinShares’ head of research.
“It’s the largest since October 2021,” he told Decrypt, “and the 19th largest weekly since records began in 2015.”
In October, Bitcoin’s price was on a steady march to setting an all-time high of $68,789.63 on November 10, and its market cap was about to reach $1.3 trillion.
Since then, Bitcoin’s market cap has been halved to $560 billion and its price sits at $29,437.67, according to CoinMarketCap. And $1.3 trillion now describes the entire crypto market cap, not just Bitcoin.
Bitcoin started last week having just fallen under $35,000 for the first time since July 2021, tumbling as low as $26,350.49 in the middle of bearish sentiment and the volatility generated as the TerraUSD (UST) algorithmic stablecoin lost its peg, and confidence in it cratered.
The CoinShares report also notes a $27 million outflow from Ethereum exchange-traded funds last week, bringing the total outflow for 2022 to $236 million. That’s 2.6% of assets under management in Ethereum-based funds, Butterfill wrote in the report.
“It’s possible it’s merge related,” he said. “Interestingly, Solana has seen substantial inflows year to date, converse to Ethereum. It suggests there is the preference for Solana over ETH.”
Solana did see a net outflow last week of $5.3 million, but it’s still up $103 million for the year.
Of all the exchange-traded crypto funds that CoinShares tracks, Grayscale is still far and away the largest provider. It manages $26 billion of the $39 billion under management, according to CoinShares.
Earlier today, Grayscale launched a European “Future of Finance” ETF and is still awaiting a decision from the SEC on converting its flagship Grayscale Bitcoin Trust into a Bitcoin spot ETF.