Ether (ETH) products accounted for 80% of last week’s institutional crypto investment as the market anticipates the launch of ETH CME futures
Financial institutions were massively accumulating Ether (ETH) as they wait for the Ether futures launch by the Chicago Mercantile Exchange (CME). For this reason, ETH accounted for 80% of last week’s institutional crypto inflow.
According to cryptocurrency assets manager CoinShares, ETH took most of the institutional funds that entered the crypto market last week. “Fund flows this week unusually focused on Ethereum with inflows into investment products totalling US$245m. US$195m of these inflows were Ethereum representing 80% of the total”, the report revealed.
CoinShares believes the massive influx of institutional cash into Ether implies that the investors want to diversify and become more comfortable with ETH. Bitcoin has been the primary beneficiary of institutional funds in recent months as its position in the market makes it the investors’ primary asset. However, Ethereum’s second place in the market and growing use cases means that investors are starting to trust the cryptocurrency.
Bitcoin saw an influx of $42 million last week, its lowest since the week ending 8 January 2021. The leading cryptocurrency reached the $47,500 mark a few hours ago, setting a new all-time high in the process. However, investors are pumping money into the market rather than taking profit, indicating that they believe the price could soar higher over the coming weeks and months.
The report states, “Despite the lower inflows into Bitcoin, we are seeing little evidence of taking profits with investors preferring to buy and hold”.
Institutional investors had largely stayed away from Bitcoin during its first decade in the financial markets. However, they have intensified their efforts in the market as they consider the cryptocurrency to be a hedge against inflation caused by the central banks pumping trillions of dollars into the market to cushion the economic effects of Covid-19.
Institutional investors increased their investment in BTC this year. The total inflow of institutional funds into digital asset investment products stands at $2.6 billion in the first six weeks of 2021. This is massive, considering institutions invested only $6.7 billion last year. The latest round of investments brings assets under management in the crypto space to a record $37.6 billion.
Grayscale remains the dominant cryptocurrency funds provider, accounting for $33.4 billion of the total crypto assets under management. The crypto assets manager allows institutional investors to access cryptocurrencies like BTC, Bitcoin Cash (BCH), ETH, Ethereum Classic (ETC), Stellar Lumens (XLM), Litecoin (LTC) and Zcash (ZEC).