Institutional Investors Pour $308 Million Into Crypto Despite Market Sell-Off

Significant inflows into digital asset investment products demonstrate the continued strength of institutional interest in cryptocurrencies. Institutional investors contributed $308 million to cryptocurrency investment vehicles last week, amid tumultuous market conditions, according to CoinShares’ most recent Digital Asset Fund Flows report.

Market Turbulence Meets Steady Inflows

The week saw mixed signals, including a staggering $576 million in single-day outflows on December 19, followed by $1 billion in outflows during the final two days of the week. Despite these figures, CoinShares emphasized the resilience of the market.

“Digital asset investment products saw a continuation of inflows last week totaling US$308m, although this masks the largest single day of outflows on the 19th December totaling US$576m, with total outflows in the final 2 days of last week at US$1bn,” stated the report.

The Federal Open Market Committee’s (FOMC) recent hawkish stance also had a noticeable impact. CoinShares noted a $17.7 billion decline in assets under management (AuM) across crypto exchange-traded products (ETPs). However, they maintained that the losses were relatively modest.

“While these outflows may sound alarming, they comprise just 0.37% of total AuM, ranking as the 13th largest single-day outflow on record,” the report added.

Bitcoin (BTC) continued to dominate institutional interest, attracting $375 million in inflows. Ethereum (ETH) and XRP also saw positive movement, gaining $51.3 million and $8.8 million, respectively.

However, multi-asset investment products, which provide exposure to a range of cryptocurrencies, faced substantial withdrawals. CoinShares highlighted this trend, stating, “The most dramatic flows were from multi-asset investment products, which saw US$121m of outflows last week.”

This dynamic showcases the shifting preferences of institutional investors, who appear to favor individual assets over diversified crypto baskets during volatile periods.

Despite market challenges, the steady inflows reflect institutional confidence in the long-term potential of digital assets. CoinShares’ insights underline a maturing market capable of weathering fluctuations while maintaining growth.