We do the research, you get the alpha!
A mix of profit taking and newly banned investment products has likely contributed to $97 million outflow across all institutional crypto investment products last week, with $73 million just in Bitcoin, according to a new report from CoinShares.
The firm publishes weekly reports on institutional allocations in crypto products like those offered by Grayscale, 3iQ, 21Shares and its own CoinShares XBT. The products provide exposure to single coins, like Bitcoin and Ethereum, or multiple assets.
Two weeks ago, most of the outflows were from the U.S., but 88% of last week’s outflows were from Europe. That could be a delayed reaction to the "hawkish FOMC statement,” writes CoinShares investment strategist James Butterfill in the report.
In February, the Fed Open Market Committee adopted new rules prohibiting senior Federal Reserve officials from purchasing cryptocurrencies, individual stocks, and foreign currencies.
The Fed Open Market Committee sets monetary policy for the Federal Reserve System.
The new FOMC rules will take effect on May 1, when the clock starts for officials to dispose of banned holdings within 12 months. The rules will also require all 12 Reserve Bank presidents to publish financial disclosures.
Butterfill also noted that after several bearish weeks of money flowing into short Bitcoin products, the flow has reversed as investors unwound $1.8 million from them last week. To short an asset is to bet against it in an attempt to make money when it loses value.
But the Bitcoin optimism had its limits.
Bitcoin outflows across all investment products accounted for $73 million of the draw down last week, bringing the total month-to-date Bitcoin outflows to $196 million.
And where Bitcoin went, Ethereum and altcoins followed. Ethereum outflows totaled $27 million. Solana and Cardano were each down $700,000 for the week, too.
By the end of last week, $34.3 billion assets under management were in Bitcoin, $13.3 billion were in Ethereum and another $3.8 billion were in multi-asset products, according to CoinShares estimates.
Multi-asset products, which give investors exposure to multiple coins, “remain a firm stalwart,” and saw inflows of $5.3 million last week, writes Butterfill.