Some institutional investors withdraw their profits as Bitcoin price retreats

CoinShares has signaled significant outflows from institutional products last week, indicating that some institutions withdrew their profits amid BTC’s recent pullback.

A new report from fund provider, CoinShares, has indicated that some institutional investors withdrew their profits during the recent BTC consolidation.

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CoinShares‘ weekly digital asset flows report identifies USD 85 million in outflows from institutional products last week, stating that the data suggests that „some investors continue to take out their profits following [BTC’s] strong price appreciation.“

The report noted that the rising U.S. dollar (trade-weighted), indicating that the USD index „is generally inversely correlated with Bitcoin prices,“ and could explain why some investors are withdrawing their profits at current levels.

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The firm also identified modest outflows from Ethereum-derived investment products, with USD 3 million exiting the markets.

Despite the profit-taking, institutional inflows remain strong, with USD 359 million flooding into cryptocurrency investment products this week. Institutions still seem almost decidedly focused on BTC, with Bitcoin products accounting for all but 1% of total capital flows for the week.

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CoinShares notes that cryptocurrency inflows have returned to their pre-Christmas levels following the 97% three-week drop after the holidays. Daily volumes are now up more than 450% year over year.

Institutional products currently account for 6% of combined Bitcoin volume, up from 14% at the beginning of the month.

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Much has been lately about the growing institutional appetite for cryptocurrencies, with major global companies recently filling their treasuries with BTC.

After hosting more than 11 million BTC in futures trading in 2020, The Chicago Mercantile Exchange announced last month that it plans to launch cash-settled Ethereum futures contracts in early February, pending regulatory approval.

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On Jan. 20, Ninepoint Partners filed its final prospectus for a Bitcoin Trust conditionally approved by the Toronto Stock Exchange.