Institutional Investors Seek Safe Haven In Crypto Products Amid Market Uncertainty


Institutional investors have been a huge part of the crypto market since they started investing in the market. Just like any other investor, institutional investors are not immune to the extreme price fluctuations that characterize the cryptocurrency market. This has resulted in huge funds looking for safe havens to move their money to while the worst of the market explodes. Sometimes, they resort to alternative digital currencies but this time they seem to be smitten with cryptocurrency products.

Outflows Rock Market

The recent recovery of the cryptocurrency market was once again affected by outflows. As prices recover, more investors choose to take profits and This resulted in more outflows. Last week saw these outflows from digital investment products grow to $141 million in one week, one of the largest in 2022. This has seen total assets under management (AuM) fall towards a one-year low, now standing at 38 A billion dollars. The last time the AuM was that low was in July 2021.

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Bitcoin and altcoins are not immune from the onslaught. For the leading cryptocurrency, the flow trend from the previous week quickly reversed. Instead, it saw outflows totaling $154 million in one week, making it the biggest loser from last week. Along the same lines, Ethereum has also followed in the footsteps of Bitcoin with outflows reaching $0.3 million.

But other digital currencies will not follow this trend. Digital assets like Cardano and Polkadot have been making their way onto the radar of institutional investors, and this has resulted in both assets bringing in $1 million in inflows respectively.

Total Cryptocurrency Market Cap Chart from TradingView.com

Crypto market cap drops to $1.239 trillion | Source: Crypto Total Market Cap on TradingView.com

Blockchain equity investment products will suffer the same fate as Bitcoin and Ethereum and outflows have reached $20 million. This came on the heels of the recent trend of massive selling of shares which saw more investors exit.

Availability of Multi-Crypto HavenB . Products

With so much bad news spreading in the market, institutional investors have turned to other places besides investing directly in cryptocurrencies. What they came up with were the multi-crypto investment products that emerged as winners last week.

These multi-currency investment products have seen inflows totaling $9.7 million in the past week alone. This brings the total assets under management to $185 million for multi-crypto investment products, while total inflows are 5.3% year on year.

Related reading | Long liquidations continue in the market clamor as Bitcoin struggles to settle above $30,000

It is still one of the best performing when compared to its other counterparts. While others have seen countless weeks of outflows in 2022 so far, there have only been two weeks in which multi-currency investment products have posted outflows, making them a safer bet for institutional investors during times of market uncertainty.

However, the year-to-date and month-to-date net flows remain positive for bitcoin. It currently stands at $307 million and $187 million respectively. Although $1.1 million has exited the market as a result of short Bitcoin outflows.

Featured image from Moneycentral, chart from TradingView.com



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