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Institutional Investors Are Abandoning Ethereum Products: What’s Happening?
Ethereum products face a significant downturn as the market corrects as sentiment declines. Institutional investors remain a driving force behind cryptocurrencies and have increased investments year-to-date (YTD). While cryptocurrencies’ annual highs are tied to institutional activity following the approval of spot Bitcoin ETFs, outflows are due to massive sell-offs triggered by macro factors.
Ethereum products took a nosedive as traditional investors reacted to last week’s price decline. Total outflows have dampened hopes of a bullish rally, however, expectations of a spot ETF listing in the summer resonate with instructors. Let’s analyze how Ethereum products have fared so far.
Ethereum products see outflow
In general, cryptocurrency institutional funds last week there were outflows with exits of $585 million due to the sharp correction. Ethereum products have seen outflows of $58.3 million over the past seven days. This brought this month’s total inflows down to $23.6 million, while year-to-date flows stood at $36 million.
This weekly decline wiped out the inflows accumulated this year after the subsequent jump Bitcoin ETFs and anticipation towards Ethereum products. With the approval granted, investors await the potential listing of these, which becomes an investment window for the asset class. Interestingly, Ethereum products still have a combined assets under management (AUM) of $14.7 billion. This growth shows the level of inflow seen in Q1 2024 during market highs.
Ethereum was not the only asset with exits in its institutional products as Bitcoin saw the most outflows. Last week, Bitcoin funds posted losses of $630 million, sending assets under management plummeting to $70.6 billion
Impact on Ethereum Price
The main cause of the current market situation is the drop in the price of cryptocurrencies. The total market capitalization fell from $2.6 trillion to $2.26 trillion amid the bearish outlook. ETH is trading at $3,387, down from $3,700 at the peak Ethereum ETF anticipation. While the price remains low, holders are targeting future highs should macroeconomic factors reverse. These price collapses have led to outflows on the institutional front.
Read also: Analysts Predict 100% Surge as Altcoin Rally Approaches
David is a financial news contributor with 4 years of experience in Blockchain and Cryptocurrency. He is interested in learning about emerging technologies and has an eye for breaking news. Keeping up to date with trends, David has reported in several niches including regulation, partnerships, cryptocurrency, stocks, NFTs, etc. Away from the financial markets, David enjoys cycling and horseback riding.