MEXCInstitutional Investors Are Leaving Ethereum Products: What’s Happening?
Ethereum products face a significant downturn based on the market correction as sentiments fall. Institutional investors remain a driving force behind crypto assets and have increased investments year-to-date (YTD). While yearly crypto highs are linked to institutional activities following the approval of spot Bitcoin ETFs, outflows are due to massive sell-offs sparked by macro factors.
Ethereum products have taken a tumble as traditional investors reacted to the price drop last week. Total outflows dampened hopes of a bullish rally however, expectations of a spot ETF listing in the summer resonate with instructors. Let’s delve into how Ethereum products fared so far.
Ethereum Products See Outflow
Generally, crypto institutional funds saw outflows last week with $585 million exits as the correction stings. Ethereum products recorded $58.3 million outflows in the last seven days. This reduced the total inflows this month to $23.6 million while YTD flows stood at $36 million.
This weekly decline wiped out accumulated inflows this year following the jump after Bitcoin ETFs and anticipation towards Ethereum products. With the approval given, investors await potential listing of these which becomes an investment window to the asset class. Interestingly, Ethereum products still have a cumulative $14.7 billion in assets under management (AUM). This growth shows the level of inflow marked in Q1 2024 during the market highs.
Ethereum wasn’t the only asset with exits in its institutional products as Bitcoin recorded the bulk of outflows. Last week, Bitcoin funds saw $630 million in losses plunging the AUM to $70.6 billion
Ethereum Price Impact
The major cause of the present market situation is the declining price of crypto assets. The total market cap dropped from $2.6 trillion to $2.26 trillion amid the bearish outlook. ETH trades at $3,387, falling from $3,700 at the peak of Ethereum ETF anticipation. Although the price remains low, holders point to future highs should macro factors flip. These price crashes led to outflows on the institutional front.
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