Crypto investment inflows experienced a sharp contrast last week, dropping to $270 million, signaling a slowdown after consecutive weeks of strong activity.
Year-to-date inflows have reached a record $37.3 billion, reflecting the continued growth of institutional interest in cryptocurrencies despite market volatility.
Crypto Inflows Drop Amid Profit Booking
Bitcoin faced significant outflows of $457 million last week, marking the first notable retreat since early September. It comes after a series of positive flows into digital asset investment products as BTC reached new highs. Specifically, crypto inflows reached $3.12 billion the prior week.
The impact of macroeconomic trends also played a role. Two weeks ago, inflows hit $2.2 billion as optimism surrounding a Republican sweep in US elections and a softer stance from the Federal Reserve buoyed investor sentiment.
However, momentum appears to be fading. Following the initial post-election rally, inflows have moderated. Last week’s figures also reflect a significant pullback compared to the $1.98 billion seen immediately after the elections. CoinShares’ James Butterfill attributes the selloff to profit-taking after Bitcoin approached the $100,000 psychological level.
“We believe is profit taking following bitcoin testing the very psychological level of $100,000,” Butterfill wrote.
Crypto Inflows. Source: CoinSharesMeanwhile, experts have divided Bitcoin’s outlook. Pessimistic analysts, including prominent figures like former Wall Street quant Tone Vays, forecast further downside.
Vays disclosed his decision to exit all long positions at $97,800, reflecting caution among seasoned traders. The analyst expressed skepticism about Bitcoin sustaining its $100,000 breakthrough this year.
“Still think sustaining a $100,000 break this year is unlikely. Will be more than happy to be wrong OR Buy the Dip sub for $90,000! Might even consider a short,” he expressed.
Conversely, more optimistic views persist. Fundstrat’s Tom Lee remains bullish, projecting Bitcoin to reach $250,000 by the end of 2025. However, Lee’s team acknowledges potential short-term setbacks, with some expecting a dip to $60,000 before resuming its upward trajectory.
Robert Kiyosaki, the author of Rich Dad Poor Dad, echoed this sentiment but highlighted that any dip is a buying opportunity for long-term accumulation.
“Bitcoin is stalled short of $100,000. That means BTC may crash to $60,000. If and when that happens, I will not sell,” Kiyosaki stated.
While Bitcoin faced outflows, Ethereum recorded a massive $634 million in inflows, signaling renewed investor confidence in the asset. Ethereum’s YTD inflows have reached $2.2 billion, supported by a growing shift in sentiment as traders pivot to altcoins amid Bitcoin’s short-term uncertainty.
The crypto exchange-traded products (ETPs) market saw a drop in trading volumes, declining to $22 billion last week from $34 billion the week before.
Even with the introduction of options on US ETFs (exchange-traded funds), their effect on overall market volumes has been limited. This development raises concerns about the level of sustained institutional interest in these financial instruments.
