For a while now, institutional investors have maintained a rather neutral stance towards both bitcoin and the overall crypto industry. As a result, there have been a variety of inflows and outflows into different digital assets, switching every week— even when the market was going down. However, latest net flow statistics are evidence of the bearish position that these significant investors have chosen in the market.
Inflows into Bitcoin (BTC) have been very little during the past month and a half, but they have been positive for the digital asset even though they haven’t had much of an impact. Considering the $13 million in outflows for BTC during the past week, the positive inflow has been cancelled out.
With outflows continuing for the third week in a row, this bearish attitude has been reflected in the short bitcoin market. The short BTC position was further increased by $7.1 million to $28 million. Such outflows indicate that institutional investors are getting rid of what they consider “risky assets,” given the uncertainty of the economy and Fed rate hikes. It is generally considered a negative development.
The outflows of digital assets for the week were $15.6 million during this period. Additionally, the month of November got off to a gloomy start with an outflow of $19 million. Investors don’t seem to think that this will be the case this time around, even though November has historically been a strong month for the cryptocurrency market.
The outcome of the FOMC meeting has significantly influenced investors’ actions in both centralized and decentralized markets, though not to the extent that was anticipated. The Fed’s fourth consecutive 75 basis point increase in interest rates demonstrated that it has no intention of changing its hardline stance against high inflation rates.
As a result, opportunities for markets like crypto to grow will be significantly restricted. Considering that the Fed decision has the most influence on the sector, it is also no surprise that the United States led the outflows for the week.
In contrast, Switzerland and Germany experienced inflows of $6.8 million and $4 million, respectively, with the majority flowing towards altcoins. With inflows of $2.7 million, Ethereum finally reversed its outflow patterns. Following this trend, XRP saw inflows of $1.1 million, marking its third consecutive week of inflows.
A shift in institutional investor mood is anticipated in the upcoming week as a result of the recent reversal in the cryptocurrency market. A big inflow should not be anticipated, however, as the overall tone in the crypto market is still pretty negative.