The cryptocurrency market is currently facing a downturn that has taken everyone by surprise. After the peaks of last year, this decline has given rise to plenty of concerns. However, it appears that crypto-based products have not been affected as such, even if the value of cryptocurrencies itself may have gone down. According to statistics, the average weekly inflows in different crypto funds stood at about $66.5 million in the month of May. This was actually a major increase from April because the same number had been around $49.6 million back then.
Bitcoin sees weekly inflows increase
Ben McMillan, IDX Digital Assets’ chief investment officer stated that institutional investors were behind the surge in weekly inflows in crypto-based products. The fact that there has been an increase in weekly inflows could indicate that the crypto market may be close to the bottom and people have already endured the losses that had to occur. He stated that getting into the crypto market at this point would mean that people can enjoy a massive pay off with just a bit of near-term volatility.
This is where institutional investors come in because they are now considering crypto to be an investment that may have long-term growth potential. Nonetheless, it should be noted that the crypto space has not made a recovery as yet. Exchange-traded products (ETPs) have certainly drawn a substantial amount of interest because these assets can give investors exposure to the crypto space, while offering them better liquidity and security.
Kraken Intelligence released a report, which revealed that a number of exchange-traded funds (ETFs) based bitcoin-futures had seen significant growth in their total assets under management in the last week alone. The VanEckBitcoin Strategy ETF and Global X Blockchain& Bitcoin Strategy ETF are two of the ETFs that have recorded increases, which amount to about 3%.
Meanwhile, ProShares Bitcoin Strategy ETF had seen their weekly outflows in April surpass $217 million, but now they have gone up by 6%. Arcane Research released data showing that there was an increase in holdings of Bitcoin exchange-traded products (ETPs) globally and it had actually reached an all-time high of about 205,000. VetleLunde, an analyst with the company said that this was quite promising.
Only bitcoin records an uptick
While all these trends are certainly worth noting, it should also be considered that this uptrend is only visible in Bitcoin-based funds. Inflows in investment products that are based on Bitcoin are more than half a billion dollars. Meanwhile, other crypto funds like those of Ether and other cryptocurrencies have recorded outflows.
The last week turned out to be the ninth one in a row that Ethereum funds had recorded outflows. The yearly outflows have now reached a value of $357 million. Likewise, inflows in other altcoins have also come to a standstill in the last week, as more and more people are shifting towards Bitcoin because it is the pioneer cryptocurrency and the only one that is recording an uptick for now.