Even though there has been a wild drive on crypto investments from institutional investors, the numbers have reduced in the past few days. CoinShares has experienced a drop of inflows by 97% from institutional investors in three weeks.
December has been a good month for the crypto industry with a rush in investments after a high performance of most cryptocurrencies. Crypto investment products have been in demand, especially from institutional investors, for some time now.
CoinShares, a crypto fund manager, reported a $29 million flow into institutional investment products on January 11. This is more than a 97% decline compared to $1.09 billion that was invested just before Christmas. The drop in investment volumes is most likely affected by the holidays.
According to the company, there was a significant surge in December on profit-taking grounds that led to outflows of crypto investment products beginning of January.
From the CoinShares database, there were crypto investment products worth $34.4 billion as of January 8. From that, 80% was locked in BTC funds while the remaining in ETH products. In 2020, investors spent about $15.6 billion on bitcoin products and funds, while $2.5 billion was on Ethereum.
That is an immense growth in just a year as the amount was $2 billion at the end of 2019.
The Bulls Vs. Bears
The report shows that the recent Bitcoin bull run is way stronger than that of December 2017. There are many more investors who have led to more robust volumes.
The bears are not left behind either, as there was a 19% plunge on Monday, which was a significant drop since March. The price drop came about with an increased selling of assets because of reasonable bitcoin price, leading to less demand.
It is clear that investors are turning to crypto assets as a store of value. There is a positive sector-wide inflow as of May 2019. Gone are the days where people feared cryptos for their high risk; right now, the reverse is true.
There is so much hope and anticipation with the price of Bitcoin. The big 22% crash means nothing if compared to what is anticipated. Grayscale is evidence that there are still more institutional investors interested as its funds rose to $28.2 billion in a week. CoinShares, on the other hand, has grown its assets to $3.4 billion.