Solana, XRP Record Inflows From Institutions As Bitcoin, Ethereum Bleed, What’s Going On?

In a surprising move, investment funds based on other altcoins failed to follow in the footsteps of crypto giants, with Solana, XRP, Cardano, and Litecoin witnessing inflows during the week. The latest weekly report on digital asset investment funds by CoinShares depicts a trend of weaker investment sentiment among institutional investors. After witnessing three consecutive weeks of inflows, crypto investment funds recorded an outflow of $147 million last week. Unsurprisingly, the majority of these outflows were concentrated in Bitcoin, while Ethereum followed closely behind as the second-largest contributor to the losses. 

Bitcoin And Ethereum Products Bleed With Outflows

Last week proved to be quite eventful for the price action of many cryptocurrencies, and data shows this trend was echoed in their associated investment funds. Bitcoin and Ethereum, which ended September on a positive note, started October on a not-so-favorable one. This trend was also reflected among institutional investors, who dialed back on their investments.

Consequently, digital asset investment funds, which were coming from a $1.2 billion inflow the previous week, failed to attract much inflows last week. As such, their net flows reversed into a negative zone and ended the week at a negative $147 million. According to CoinShares, this was mostly due to higher-than-expected economic data last week, which reduced the possibilities of a further rate cut by the Fed. 

Bitcoin ended the week with an outflow of $159 million. Most of these outflows were recorded through Spot Bitcoin ETFs in the US, which ended the week at $301.5 million in outflows. Ethereum-based investment funds also witnessed a net outflow of $28.9 million last week, with the majority coming from Spot Ethereum ETFs in the US. 

Solana, XRP, And Cardano Record Surprising Inflows

Defying the prevailing trend, several altcoins experienced positive inflows from institutional investors, reflecting continued interest in these assets despite the broader downturn affecting Bitcoin and Ethereum. Solana, XRP, Cardano, and Litecoin witnessed $5.3 million, $0.3 million, $0.3 million, and $0.9 million in inflows, respectively. 

The most notable investment from institutional investors went into multi-asset products, which witnessed $29.4 million in net inflows last week. This is particularly notable because last week’s data marked the 16th consecutive week of inflows into multi-asset products. 

Another notable highlight was the inflow into Short Bitcoin products. Short Bitcoin products also ended the week at a net inflow of $2.8 million, further reflecting the reversal from a bullish Bitcoin sentiment. BNB was the only altcoin to follow Bitcoin and Ethereum, registering $1 million of net outflow. 

In terms of geographical location, the US, Germany and Hong Kong saw outflows of $209 million, $8.3 million and $7.3 million, respectively. On the other hand, Canada and Switzerland received inflows of $43 million and $35 million, respectively.

Featured image created with Dall.E, chart from Tradingview.com