Institutional crypto selling hits longest stretch since February 2018

Institutional managers continued to profit from their cryptocurrency holdings, with bitcoin funds seeing outflows for the sixth consecutive week, according to data from CoinShares.

Outflows from digital asset investment products totaled $79 million last week, marking the third straight week of outflows and the longest run of withdrawals since February 2018. Bitcoin funds saw outflows total $89 million, while Ethereum products saw $1.9 million in outflows.

So far this year, Bitcoin investment products have generated more than $4.1 billion in net inflows. Meanwhile, Ethereum products have accumulated $992 million since the beginning of 2021.

Multi-asset investment products that hold a basket of cryptocurrencies bucked the trend last week with inflows of $10 million. These funds have generated $351 million in inflows this year, the data showed.

Institutional buying of cryptocurrencies has wavered in recent weeks as portfolio managers continue to track a sharp drop in the value of the asset. Bitcoin is currently hovering below $33,000, down 50% from its peak in May. The total market value of all cryptocurrencies fell below $1.4 trillion on Monday, nearly halving from last month's high.

While on-chain indicators appear to be showing favorable signs of a bottom, with Bitcoin being bought up by long-term holders from newbie wallets, market sentiment remains very bearish as negative news headlines roll in. China’s Bitcoin mining ban, Bitcoin’s ominous “death cross,” and Grayscale’s massive BTC unlock in July are just some of the headlines weighing on investor sentiment.