In the seven days through March 26, flows of digital asset investment products decreased to around $79 million, the lowest since October, according to a new study by a digital asset investment company, CoinShares.
Cryptocurrency fund’s slowing investment appetite echoes sideways the later price action of bitcoin (BTC). In the past week, the cryptocurrency traded between $50,000 and $60,000.
Volatility Remain High as Investor Appetite is Waning
The report shows that the appetite for investment in digital assets has fallen over the last couple of weeks, with high uncertainty and the market exchange sideways.
They stated that they recently noticed that investors had substantially reduced the inflows and outflows for more extensive and long-defined pre-2016 investment products.
CoinShares holds the opinion that this is because investors are sitting on their earned interest for many years.Investment flows are slowing in the United States while Europe and Canada remain stable.
Trading volumes of digital investment assets decreased last week to 788 million dollars a day, up from an average of 900 million dollars a day into 2021.
According to Cardify, the total purchasing volume increased to $1,212, compared with just $432 at that point in 2020; in January 2021, investment volumes were 23 times as high as 2019. Withdrawals— or sale of crypto assets — accounted for 26.8% of transactions, decreasing from 43.1% in 2019 when bitcoin was worth just above $3,000.
Bitcoin has earned the most significant inflows, the report states. However, Ethereum is still more familiar with inflows of 5 million dollars on a market capitalization basis – as we’ve seen in previous weeks.
Institutional Investors Do not Plan on Making Crypto Investments
After last years’ massive institutional investments, the price of cryptocurrencies, especially Bitcoin, was skyrocketing. We mentioned big investors such as Microstrategy and Tesla among other investors. However, a vast majority of institutional investors surveyed by JPMorgan said they do not intend to start investing or trading cryptocurrencies, though 58% said crypto is here to stay.
It could explain why even though investors are sitting on their profits, no new investors are jumping on the ship. In a survey of roughly 3,400 investors covering 1,500 institutions around the work, 11 % of investors said their firm either trades or invests in crypto, while 89% said their firm doesn’t.
The survey shows the state of the interest of institutional investors in cryptocurrencies. Although the parabolic surge in Bitcoin has gained both retail and institutional investors’ attention, the institutional community remains a little divided on the crypto’s future.
The heyday of cryptocurrencies may have come and gone, but there could be many upsides still to go in the crypto sector. We know one thing with certainty: once cryptocurrencies were able to improve the whole financial system, the noise of this nature will not be gone immediately, so expect to hear at least another year from cryptocurrencies – or its number one fans.