2 Triggers Cause Negative Sentiment Among Institutions

New reports have surfaced indicating that institutional investors are feeling pessimistic about cryptocurrencies due to two main factors.

According to CoinShares, a digital assets manager, the ongoing regulatory concerns in the United States and the strength of the dollar are causing this negative sentiment.

In their most recent Digital Asset Fund Flows Weekly Report, CoinShares revealed that last week saw digital assets experience outflows of almost $60 million, marking the fourth consecutive week of outflows.

“Digital asset investment products saw outflows totalling US$59m last week, marking the fourth consecutive week of outflows, this run of outflows now totals US$294m and represents 0.9% of total assets under management (AuM).”

CoinShares stated the following:

“Inflows were also seen in short investment products, suggesting sentiment remains poor for the asset class. We believe continued worries over regulation of the asset class and recent dollar strength are the most likely reasons for this. Trading volumes also dropped significantly, by 73% in comparison to the prior week to just US$754m for the week.”

Recent data from CoinShares has revealed a significant outflow of $69 million from Bitcoin (BTC) last week, with a noteworthy inflow into short-BTC products. Interestingly, the inflow into short-bitcoin saw its largest single week since March 2023, reaching a total of US$15m.

This surge in inflows is particularly noteworthy given the heightened regulatory uncertainty during March 2023.

Furthermore, Ethereum (ETH), Solana (SOL), and multi-asset investment vehicles experienced outflows of $4.8 million, $1.1 million, and $0.8 million, respectively. In contrast, XRP products saw a modest inflow of $0.4 million.

According to a report by Fidelity Digital Assets, the subsidiary of investment giant Fidelity Investments that focuses on cryptocurrency, Ethereum (ETH) is currently being sold at a discounted price.

The report, titled ‘Ethereum Investment Thesis’, states that with Ethereum’s current supply at around 120 million and annualized network fees exceeding $6.8 billion, the estimated price of ETH using a discounted cash flow model is approximately $2,090 – 28% higher than its current price.

We suggest that you check out the previous article that we shared in order to learn more details about this.