Crypto Fund Inflows Drop Significantly After December Record; Evidence of Profit Taking: CoinShares Report
Still, weekly flows remain consistently positive, ever since May 2019.
Investment inflows in cryptocurrency funds and products saw a decline in the first week of January at just $29 million, a big drop from a record $1.09 billion in the week before Christmas, as per the latest report from the asset manager CoinShares.
Still, the surge in cryptocurrencies’ prices pushed the total assets under management (AUM) at a record $34.4 billion as of Jan. 8. But this uptrend in price also drove investors to take profit, with some investment products seeing outflows.
Meanwhile, weekly flows remain consistently positive, ever since May 2019, “highlighting what we believe is an increasing use as a store of value,” states the report.
Amidst this, there has been “much greater” participation in recent price rises as the investment product volume averaged 10.5% of total Bitcoin trading volumes.
Although these levels have not been seen since Dec. 2017, they have been much greater compared to net new assets at $8.2 billion in 2021 to 2017’s $534 million.
The profit-taking has been one of the reasons that drove the prices of Bitcoin BTC -1.09% Bitcoin / USD BTCUSD $ 33,780.31
-$368.21-1.09% Volume 75.16 b Change -$368.21 Open $33,780.31 Circulating 18.6 m Market Cap 628.27 b
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“Bitcoin is still up on the year and the current 22% crash won’t intimidate any of the new institutional money that just hopped onto the crypto bandwagon,” said Edward Moya, senior market analyst at OANDA in New York.
Inflows into Bitcoin investment products totaled $24.3 million in the first week of the year, while Ethereum accounted for $5.3 million. Compared to $15.6 billion pumped by investors into Bitcoin products, Ethereum inflows reached nearly $2.5 billion.