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Crypto Funds Draw $90M in New Money as Confidence Returns
Bitcoin-focused funds have attracted new capital for three straight weeks, after a period of outflows in recent months.
Updated May 11, 2023, 6:33 p.m. Published Oct 4, 2021, 10:20 p.m.
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Digital asset investment products attracted $90 million in new money in the seven days last Friday, the seventh straight week of inflows.
Bitcoin-focused funds took in $69 million, according to a report published Monday by CoinShares. It was the third straight week of inflows for bitcoin funds, pushing the cumulative intake over the period to $115 million and cementing a trend reversal from the prior few months when redemptions were the norm.
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“We believe this decisive turnaround in sentiment is due to growing confidence in the asset class among investors and more accommodative statements from the U.S. Securities and Exchange Commission and the Federal Reserve,” according to the report’s authors.
Crypto funds focused on Ethereum, the second-largest blockchain, saw $20 million of inflows.
Alternative digital assets appeared to show waning interest. Funds focused on Binance’s BNB token, Polkadot and Tezos saw minor outflows of $800,000 each. Cardano-focused funds saw minor inflows of $1.1 million while Solana attracted $700,000.
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McGlone links bitcoin’s downturn to record U.S. market cap-to-GDP levels, low equity volatility and rising gold prices, warning of potential contagion into stocks.
What to know:
- Bloomberg Intelligence strategist Mike McGlone warns that collapsing crypto prices and a potential bitcoin slide toward $10,000 could signal mounting financial stress and foreshadow a U.S. recession.
- McGlone argues the post-2008 "buy the dip" era may be ending as crypto weakens, stock market valuations sit near century highs relative to GDP, and equity volatility remains unusually low.
- Market analyst Jason Fernandes counters that a drop to $10,000 bitcoin would likely require a severe systemic shock and recession, calling such an outcome a low-probability tail risk compared with a milder reset or consolidation.
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