The early birds betting bitcoin’s bottoming out
Categories: Crypto News US
Some investors are now betting that bitcoin is bottoming out, judging by the money heading into listed cryptocurrency funds, which represent just a slice of the market yet are popular among institutional and retail players alike.Overall flows into such funds turned positive last month, with a weekly average inflow of $66.5 million, a reversal from a dismal April when they saw a weekly average outflow of $49.6 million, according to data provider CryptoCompare.“It’s largely institutional, and to a degree retail investors, recognizing that the pain is already endured, and we’re closer to the bottom than we are to the top,” said Ben McMillan, chief investment officer of Arizona-based IDX Digital Assets. “If you’re getting into crypto at these levels, a little near-term volatility could be worth a long-term payoff,” he added. “A lot of institutional investors are starting to look at crypto as a source of longer-term growth potential.”It’s hard to know whether the tentative flows will last, though, or if the nascent trend will be replicated across the wider market.The assets under management of several bitcoin-futures ETFs have risen in the past week, according to Kraken Intelligence. The assets of the ProShares Bitcoin Strategy ETF’s have grown 6%, while those of the Global X Blockchain & Bitcoin Strategy ETF and VanEck Bitcoin Strategy ETF have climbed over 3%. BY comparison, ProShares’ bitcoin fund saw outflows of over $127 million in April.The bullish trend has extended into June, with global bitcoin ETP holdings jumping to an all-time high of 205,008 bitcoin in the first two days of the month, Norway-based crypto research firm Arcane Research found.“Bitcoin has been rangebound in concert with the broader market activity of late, investors are looking for a bottom and are uncertain where that is,” said Jack McDonald, CEO of PolySign, which specializes in digital asset custody solutions for institutional investors. Shares of the Grayscale Bitcoin Trust one of the biggest bitcoin funds with over $19 billion in assets, are trading at a 29% discount to net asset value, around its steepest discount since inception and indicative of low demand for the product.And despite the pick up in May, many market watchers expect inflows to crypto funds to remain subdued until macroeconomic and regulatory risks become more clear.