Why Institutional crypto funders tighten belt, take back 97% funds in 21days

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CoinShares announced “proof of potential profit taking” by institutional investors, with weekly crypto fund inflows down 97% in less than one month.

Capital inflows into crypto funds and investment goods collapsed in the first week of January after the recording of new all-time highs in late December.

According to crypto fund manager CoinShares’ Jan. 11 Digital Asset Fund Flows survey, the first trading week of the new year saw just $29 million pour through institutional crypto items. That’s more than 97% less than the $1.09 billion spent in the week before Christmas. Volumes are expected to have been dampened by traders taking holidays in the new year.

However, the firm also states that the increasing inflows of December have been accompanied by recent “proofs of potential profit taking,” with several crypto investment products showing weekly outflows at the beginning of January.

As of January 8, CoinShares reported that $34.4 billion in capital was kept in crypto investment goods—$27.5 billion, or 80 per cent, of which was held in locked-in BTC funds, while $4.7 billion, or about 13.5 per cent, was invested in ETH products.

The study reports that Bitcoin funds have also generated higher amounts lately than during the December 2017 bull run, stating: “We have seen a much larger investor participation this time round with nett new assets of US$8.2 billion compared to only US$534 million in December 2017.”

Capital flows into digital asset investment products: CoinShares

Provided that sector-wide inflows have stayed steadily positive since May 2019, the study claims that crypto is seeing “increased use as a store of value.” CoinShares CEO Jean-Marie Mognetti recently said:

“The narrative shift around Bitcoin over the last six months has been profound. Investors used to consider it a risk to allocate to Bitcoin. Now it’s a risk not to allocate to Bitcoin.”

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