Institutional Investors Shift Focus to Bitcoin from Altcoins

Jafrin  |  Oct 5, 2021

New research into the changing attitudes around investing in cryptocurrencies suggests that institutional investors have shifted away from altcoin back to Bitcoin, with BTC investment products leading the inflows for digital asset products for the second week in a row.

BTC Investment Products Generated $68.7 Million Inflows Last Week

According to CoinShares’ latest Digital Asset Fund Flows Weekly report, Bitcoin investment products generated $68.7 million worth of inflows between Sept. 27 and Oct. 1, representing a 36% increase in exposure week-over-week.

Over the past week, the total inflows for digital investment products stood at $90 million, marking the seventh consecutive week of inflows as institutional investors continue to increase exposure to digital assets.

Not only Bitcoin, but institutional investors also bought a significant amount of Ethereum (ETH) investment products, with inflows totaling $20.2 million with BTC and ETH products gaining roughly 7.4% and 3.2% for the week respectively.

In the meantime, altcoin products tracking Cardano (ADA), and Solana (SOL) posed inflows of $1.1 million and $700,000 respectively, while Polkadot (DOT) and Binance Coin (BNB) fund lost $800,000 each with multi-asset funds seeing minimal inflows of $1.9 million.

It seems that institutional demand for Solana appears to have faded out with inflows to products tracking SOL crashing by 98% since posting highs of $38.9 million five weeks ago.

Despite the ongoing bull cycle, CoinShares highlighted that last week’s trade volume of $2.4 billion remains low compared to the $8.4 billion worth of institutional crypto products traded weekly during the height of 2021’s bull cycle in mid-May.

Institutional Investors Eyes Crypto for Long-Term

Based on CoinShares estimates, institutional asset managers currently represent combined assets under management (AUM) worth $57.1 billion combined, a weekly increase of 8.5%. Grayscale continues to be the lead, representing $41.1 billion or 71% of the sector’s total AUM with CoinShares XBT and Purpose funds rank in second and third with $2.2 billion and $2.1 billion worth of AUM respectively.

In the meantime, new research by Nickel Digital Asset Management highlights that 62% of institutional investors who don’t already have exposure to cryptocurrencies are looking to do so for the first time within the next year.

“There is no doubt that the crypto assets market is becoming more mainstream in the institutional and wealth management sectors,” the head of business development of Nickel Digital Henry Howell said.

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