Institutional investments in crypto touch a new peak, signals market bulls return

  • About 50 percent of the total institutional inflows went to Bitcoin and a staggering more than 40 percent went to Solana (SOL).
  • European institutions chipped in with fresh investments after the EU Parliamentarians couldn’t gather enough support to ban the PoW cryptocurrencies.

On Monday, March 28, CoinShares published its Digital Asset Fund Flows Weekly Report stating that institutional investments in crypto touched their highest in three months. Last week, the crypto market saw a total weekly inflow of $193 million. However, more than half of this figure went into Bitcoin alone.

Last week, the tide completely turned in comparison to its previous week of net outflows. Furthermore, the $193 million inflow last week after a $47 million outflow in the previous week suggests that bulls are back in action.

The last time the crypto market witnessed these big inflows was in December 2021. The first of December had netted $184 million in net inflows. This was probably just a week after Bitcoin (BTC) touched its all-time high of $69,000.

Apart from Bitcoin, Solana dominated the weekly inflows in the altcoin space. Just behind Bitcoin’s $98 million inflows, Solana’s inflows stood at a staggering $87 million. The SOL cryptocurrency has also performed well recently with its weekly gains at $87 million. CoinShares notes that this is the largest single weekly inflow for Solana.

Furthermore, SOL-based funds represent 36% of assets under management (AUM) with institutional firms. This is also the largest altcoin allocation by institutions, after Ether. Last week, Ethereum-based funds saw a net inflow of $10.2 million.

European institutional firms dominated weekly inflows

If we take a look at the demographic division, Europe was the most significant contributor. A staggering 76 percent of the total inflows of $147 million came from Europe alone. This happened as institutional investors cheered the news that the bill banning Proof-of-Work (PoW) cryptocurrencies hasn’t been passed by the European parliament.

On the other hand, North American institutional firms have been withdrawing their holdings amid concerns about regulation. We at Crypto News Flash reported how the crypto regulatory order from U.S. President Joe Biden had impacted crypto outflows. However, the last week’s inflows correlate with Bitcoin and crypto posing a strong rally.

Over the last year and so, there’s been an exponential growth in the number of institutional payers joining the crypto market. But many still believe that the crypto market is just “too volatile” to participate in. Furthermore, the lack of regulatory clarity could also be holding them back.

But some institutional players are now coming to the forefront to express support. As per the latest report, the world’s largest hedge fund – Bridgewater Associates – is looking to invest in crypto through an investment vehicle. But we have yet to hear from the founder Ray Dalio on this matter.

Billionaire Ray Dalio has been vocal about his support for Bitcoin. Besides, he also said that he holds some ETH in his portfolio and believes that crypto could be a good bet to protect one’s money from soaring inflation. But Dalio also advises caution and discipline with crypto investments.

About Author

Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fictions novels and sometimes explores his culinary skills.

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