Why Are Ethereum Institutional Products Selling Out Before ETF Launch?
Ethereum institutional products have seen outflows in recent weeks despite widespread anticipation of a spot ETF listing in the United States, reflecting the state of the cryptocurrency market, which has been plagued by low sentiment amid ongoing negative volatility since the Bitcoin price dropped below $70,000.
Crypto funds are seeing some levels of institutional investment in the market, with inflows indicating increased interest in the products. The market saw a general decline last week, with Ethereum dominating the numbers with outflows of $30 million. Ethereum institutional products suffered losses of $60.7 million last week, erasing inflows into other assets.
To put this into perspective, Bitcoin funds net gain of $10 million, while the multi-asset gained $17.9 million, leaving Ethereum in the red. The $60 million outflow recorded last week brings monthly outflows to $37 million and year-to-date inflows to $25 million. This decline in Ethereum institutional products makes the asset the biggest loser since August 2022, at $61 million.
Why Were Ethereum Enterprise Products Rejected?
Despite the momentum of spot Ethereum ETF approvals, institutional investors have temporarily moved away from the asset for various reasons. This has caused assets under management (AUM) to drop to $14.35 billion. Ethereum funds have fallen as the asset’s price has fallen amid future predictions.
Most shareholders have seen the low price impacting earnings and have decided to restructure their holdings. Like Bitcoin, which saw a slight price correction in December, Ethereum is also on a similar path, although the outflows are deeper. At press time, ETH It is trading at $3,404, down from $3,700 last month. General weak market sentiment and slower outflows from other funds are factors.
Bulls are taking positive
Ethereum bulls are eyeing potential price increases following the listing this summer. In the past month, spot ETF applications have boosted the asset’s price by 22%, affecting other altcoins as well. These highs prior to the recent corrections are seen as key areas for institutional inflows. Users in general are noting the rapid rise in Bitcoin’s price following the approval of ETFs on January 11. Bitcoin price It rose to a new all-time high above $73,000.
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David is a financial news writer with 4 years of experience in Blockchain Technology and Cryptocurrencies. He is interested in learning about emerging technologies and has a knack for keeping up with breaking news. Keeping up to date with trends, David has reported on a variety of topics including regulation, partnerships, crypto assets, stocks, NFTs, etc. Away from the financial markets, David enjoys cycling and horseback riding.
The content presented may include the author’s personal opinion and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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