Crypto: Institutional funds experiencing lots of outflows

Institutional funds specializing in cryptocurrencies continue to face capital outflows for the fifth consecutive week, according to the latest report from CoinShares. With a withdrawal of $32 million last week, the total outflows now amount to $232 million. Despite a decrease compared to previous weeks, institutional investors remain cautious towards cryptos. Let’s explore the reasons behind this trend.

The outflow trend persists

As the cryptocurrency market experiences a stagnant phase, with Bitcoin struggling to surpass the $30,000 mark, investors are displaying a negative sentiment.

According to a recent CoinShares report on crypto asset fund flows, crypto-focused investment funds have recorded a series of capital outflows for the fifth consecutive week. 

Between May 15th and May 19th, these funds witnessed a capital outflow of $32 million. Bringing the total to $232 million. Despite a slight decrease compared to previous weeks, this trend still evokes a certain reluctance among institutional investors, according to James Butterfill, Head of Research at CoinShares.

Exchange volumes have also declined, reaching $900 million for the week, representing a 40% decrease compared to the year’s average. This trend has also been observed on centralized exchange platforms. Where volumes hit their lowest level since late 2020, amounting to $20 billion for the week.

This trend persists, with Bitcoin funds experiencing the highest number of outflows, totaling $33 million. In comparison, Ethereum funds saw smaller outflows, with only $1 million.

Investor geographic preferences

Regarding the geographic distribution of fund outflows, Germany takes the lead with $24 million, accounting for 73% of the total. Institutional funds based in Switzerland also recorded outflows amounting to $3.3 million. 

These coincided with the approval of European legislation on cryptocurrencies, MiCA. Additionally, US funds recorded an outflow of $5.5 million, while Canada, a crypto supporter, saw an inflow of $2.2 million.

During the five-week period from April 21st to May 19th, the price of Bitcoin experienced a decline of approximately 4.8%. It is now stabilized at $26,842. Currently, at the time of writing, the price of BTC stands at $27,309, according to data provided by CoinMarketCap.