Recent assessments reveal a notable shift in the landscape of institutional interest in cryptocurrencies. Following weeks of steady demand, the market is now witnessing a downturn. The price of Bitcoin (BTC) remains relatively stagnant around $97,000, largely influenced by recent macroeconomic factors and policy decisions, particularly those associated with tariffs.
What Are the Current Trends in Institutional Demand?
For the past 19 weeks, institutional investment products have attracted substantial net inflows, nearing $30 billion. The launch of the U.S. Spot BTC ETF in January 2024 contributed to a remarkable net inflow of $16 billion in this same period. However, recent trends indicate a shift, with last week marking the first instance of net outflows, quantified at $415 million.
What Caused the Decrease in Demand?
Market disruptions followed comments from Federal Reserve Chair Jerome Powell and unexpected inflation data, prompting ETF investors to sell off their holdings. The majority of outflows, totaling $464 million, originated from the U.S., while countries like Germany and Canada reported modest inflows.
Highlights from the recent market dynamics include:
- Net inflows of $29.4 billion were recorded post-November elections.
- Last week’s outflows did not significantly boost short BTC positions.
- Solana saw the highest altcoin inflows, with XRP and SUI also gaining attention.
Currently, Bitcoin’s price continues to hover near $96,000, maintaining a stable range despite recent fluctuations, indicating a cautious optimism among long-term investors.
