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Minor inflows for digital asset investment products over the last few weeks suggest a \u201ccontinued hesitancy\u201d toward crypto among institutional investors amid a slowdown in the United States economy.\u00a0<\/p>\n
In the latest edition of CoinShares\u2019 weekly \u201cDigital Asset Fund Flows\u201d report, CoinShares head of research James Butterfill highlighted<\/a> stand-offish institutional sentiment toward crypto investment products, which saw \u201cminor inflows\u201d for the third week in a row:<\/p>\n \u201cThe flows remain low implying continued hesitancy amongst investors, this is highlighted in investment product trading volumes which were US$886m for the week, the lowest since October 2020.\u201d<\/p><\/blockquote>\n Between Sept. 26 and Sept. 30, investment products offering exposure to Bitcoin (BTC<\/a>) saw the most inflows at just $7.7 million, with Ether (ETH<\/a>) investment products close behind with $5.6 million worth of inflows. Short BTC products represented the only other notable inflows of $2.1 million. <\/p>\n These inflows were offset by more than $3.5 million worth of outflows for investment products offering exposure to altcoins such as Polygon (MATIC<\/a>), Avalanche (AVAX<\/a>) and Cardano (ADA<\/a>), while multi-asset and Solana (SOL<\/a>) funds also shed $700,000 and $400,000 during that week, respectively. <\/p>\n Commenting on the current state of the crypto market, and the institutional outlook of late, Markus Thielen, head of research and strategy at Singapore-based crypto financial services platform Matrixport, noted that:<\/p>\n \u201cThe market is currently in a wait-and-see environment whereas a potential positive shift after the US Mid-Term elections could have significant regulatory changes.\u201d<\/p><\/blockquote>\n \u201cLast night\u2019s US economic data, notably the ISM index, showed that growth has materially slowed down in the US economy and there is now the possibility that the Fed will become less hawkish. The USD rally appears to have lost one of its key drivers and this could signal a pause in rate hikes. This could be very bullish for digital assets into year-end,\u201d he added.<\/p>\n Looking at the month-to-date (MTD) flows as of Sept. 30, ETH products have been the most offloaded by institutional investors<\/a> despite the Merge going through<\/a> on Sept. 15, with $65.1 million worth of outflows. <\/p>\n \u201cLooking back, the Merge was not good for sentiment with outflows totaling US$65m in September. Increased regulatory scrutiny and a strong US Dollar being the likely culprits as the shift to Proof of Stake was executed successfully,\u201d said Butterfill.\u00a0<\/p>\n In contrast, Short BTC funds and BTC investment products saw minor inflows of $15.2 million and $3.2 million MTD. <\/p>\n While there has been limited action of late for crypto investment products tracked by CoinShares, Bloomberg Intelligence has observed a notable trend in crypto exchange-traded funds (ETFs)<\/a>. <\/p>\n Related: <\/em><\/strong>A crumbling stock market could create profitable opportunities for Bitcoin traders<\/em><\/strong><\/a><\/p>\n According to Bloomberg Intelligence data, institutional investors offloaded $17.6 million from crypto ETFs during Q3 2022, providing a stark contrast to the \u201crecord $683.4 million withdrawn from such funds\u201d in Q2 2022. <\/p>\n \u201cThe outflows mainly took place in the past two months. In July, investors poured upwards of $200 million into crypto ETFs,\u201d Bloomberg noted<\/a> in a Sept. 30 article, adding that the decreased outflows were likely due to \u201cnarrow fluctuations\u201d in crypto prices during Q3. <\/p>\n<\/div>\nCrypto ETF outflows slowing <\/h3>\n