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Institutional Investors Seek Safe Haven In Crypto Products Amid Market Uncertainty

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Institutional investors have been a big part of the crypto market ever since they started investing in the market. Just like every other investors, institutional investors are not immune from the wild price fluctuations that characterizes the crypto market. This has resulted in big money looking for safe havens to move their money into while the worst of the market blows over. Sometimes, they turn to altcoins but this time around seem to have fond better luck with crypto products.

Outflows Rock Market

The recent recovery of the crypto market has been rocked once more by outflows. As prices had recovered, more investors had chosen to take profits and this had lead to more outflows. The previous week saw these outflows from digital investment products grow as high as $141 million in a single week, one of the largest in 2022. This had seen the total assets under management (AuM) decline towards one-year lows, now sitting at $38 billion. The last time AuM was this low had been in July 2021.

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Both Bitcoin and altcoins were not spared the onslaught. For the pioneer cryptocurrency, the inflow trend from the previous week had been swiftly reversed. It instead saw outflows totaling $154 million in a single week, making it the largest loser from last week. In the same vein, Ethereum had also followed in the footsteps of bitcoin with outflows reaching $0.3 million. 

Other altcoins would not follow this trend though. Digital assets such as Cardano and Polkadot have been making their way into the radar of institutional investors and this saw both asset bring in $1 million in inflows respectively. 

Total crypto 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 would suffer the same fate as Bitcoin and Ethereum and outflows had reached $20 million. This followed the recent trend of broad sell-off in equities that had seen more investors move out of them.

Multi-Crypto Products Provide HavenB

With so much bad news floating around the market, institutional investors have sought refuge in other places besides directly investing in cryptocurrencies. What they have landed on have been the multi-crypto investment products which have emerged the recent winners for last week. 

These multi-crypto investment products saw inflows totaling $9.7 million for last week alone. This has brought the total assets under management to $185 million for multi-crypto investment products, while the total inflows make up 5.3% on a year-to-date basis.

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It remains 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 been only two weeks where multi-crypto investment products had recorded outflows, making it a safer bet for institutional investors during times of market uncertainty.

Nevertheless, year-to-date and month-to-date net flows remain positive for bitcoin. It currently sits at $307 million and $187 million respectively. Although $1.1 million had left the market as a result of outflows from short bitcoin.

Featured image from Moneycentral, chart from TradingView.com

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