Crypto investment funds saw $2B in weekly outflows—the third straight week of declines. Is the bull run ending? | Credit: Getty Images. Key Takeaways Crypto investment products saw $2 billion in outflows, the worst weekly total in three weeks. Bitcoin and Ethereum ETPs took the biggest hit, accounting for more than $2 billion in combined exits. The U.S. drove 97% of the outflows, underscoring weakening institutional sentiment. For the third straight week, çrypto investment products have been hit ...

Core Insights - Institutional demand for regulated crypto investment products remains strong despite overall market volatility, with crypto ETP assets only dipping by 2.5% in October compared to a 5.5% decline in the overall crypto market value [1][3][10] Institutional Interest - Bitcoin ETPs now account for approximately 7% of total Bitcoin supply, driven by significant institutional interest following the approval of spot Bitcoin ETFs in the U.S. in early 2024, which opened access to larger capital bases [2][5][6] - The demand for Bitcoin ETPs is bolstered by digital asset treasury plays and unlisted funds, indicating a robust appetite from traditional finance and institutional investors [6][10] Ethereum Growth - Ethereum ETP assets have experienced nearly 90% growth this year, as investors diversify their portfolios following gains in Bitcoin [3][7] - The increasing demand for Ethereum is attributed to its status as the second most capitalized asset and its strong trading volume, making it a preferred choice among traditional finance investors [8][9] Market Trends - There is a noticeable shift from altcoin-specific products to basket ETPs that include Bitcoin and Ethereum, driven by geopolitical and macroeconomic uncertainties, leading to a "flight to quality" among investors [3][10][12] - Altcoin ETPs are seeing a decline in demand, while basket products are gaining traction due to their perceived safety in the current market environment [10][12] Future Outlook - The uncertainty surrounding macroeconomic and geopolitical conditions is expected to continue influencing investor behavior, with a cautious approach being adopted towards riskier assets [10][11][13] - Predictions for 2026 remain uncertain, particularly due to potential geopolitical tensions and economic policies from the U.S. [13]

Core Insights - The UK authorities are launching crypto ETPs, potentially late compared to the US, where spot Bitcoin and Ethereum ETFs were approved over a year ago [1][6] - Despite the anticipated positive impact on Ethereum prices, the market has not responded favorably, with ETH USD experiencing a decline [2][3] - The Financial Conduct Authority has lifted a four-year ban on retail access to crypto ETNs, allowing retail investors to purchase through familiar brokerage accounts, which could stimulate demand for Ethereum [7] Market Performance - ETH USD has decreased nearly 4% in the past week, trading below $3,900, and remains over $1,000 away from its all-time highs [3] - A critical support level for ETH USD is identified at $3,700, with local resistance at $4,250 that needs to be surpassed for an uptrend to continue [4] - Trading volumes on major exchanges like Binance and OKX have dropped by over 8%, indicating a bearish sentiment despite a bullish long-short ratio [5] Future Outlook - The success of Ethereum ETPs on the London Stock Exchange is contingent on the reception from major players like BlackRock and WisdomTree [6] - The potential for tax-free gains for retail investors could act as a catalyst for increased investment in Ethereum, possibly pushing prices above $4,000 and even $5,000 in the medium term [7]

21Shares, Bitwise and WisdomTree open UK retail access to Bitcoin and Ethereum ETPs following FCA approval https://t.co/7mc40QmAar ...

Core Insights - Bitcoin has experienced a significant 16% decline, which appears to be more psychological than structural, despite a stable macro backdrop and only a minor 2% dip in the Nasdaq [1][5] - The ongoing U.S. government shutdown is contributing to rising uncertainty over fiscal policy, with an 82% chance that it will last beyond 30 days, impacting business sentiment [2][5] - Despite short-term bearish sentiment, the fundamentals supporting Bitcoin remain strong, driven by macroeconomic weakness, potential Federal Reserve easing, and distrust in traditional financial systems [5][6] Market Dynamics - Bitcoin ETPs saw outflows of $588 million, but overall digital asset ETPs recorded net inflows of $40 million, indicating that institutional positioning remains robust [3][6] - Selling pressure is primarily among crypto-native investors rather than long-term holders, suggesting resilience in the investment case for Bitcoin [3][4] - Renewed U.S.–China trade tensions may pose a greater threat to equities than to digital assets, with Bitcoin potentially serving as a hedge against systemic financial risk [4][6] Long-term Outlook - The current correction may represent a temporary dislocation rather than a breakdown, emphasizing the importance of distinguishing between price action and fundamentals for investors [6][7] - Structural forces driving institutional adoption and distrust in the banking system continue to support Bitcoin's long-term investment thesis [6][7]

Core Insights - CoinShares, a European digital asset manager with approximately $10 billion in assets under management, announced its acquisition of Bastion Asset Management, which is regulated by the Financial Conduct Authority [1] - The acquisition aims to enhance CoinShares' capabilities in actively managed crypto strategies and support its expansion into the U.S. market [1][4] Group 1: Acquisition Details - The financial specifics of the acquisition have not been disclosed and are subject to UK regulatory approval [1] - Bastion Asset Management specializes in systematic investment strategies for digital assets, focusing on market-neutral and quantitative approaches for institutional clients [2] Group 2: Strategic Implications - CoinShares is recognized for its exchange-traded products (ETPs) that provide passive exposure to cryptocurrencies; the addition of Bastion's strategies will enable the firm to offer a combination of passive and active management products [3] - This integration could allow institutional investors, such as pension funds, to diversify their portfolios with market-neutral crypto funds aimed at stabilizing returns during market volatility [3] Group 3: U.S. Market Expansion - The acquisition strengthens CoinShares' ambitions in the U.S. market, where it plans to launch actively managed funds tailored for institutional investors, leveraging its existing Investment Advisor license [4] - Regulatory clarity in the U.S. has made the launch of such products increasingly feasible [4] Group 4: Leadership Perspective - Jean-Marie Mognetti, CEO and Co-Founder of CoinShares, emphasized that the acquisition aligns with the company's vision to provide comprehensive digital asset management solutions and highlighted the proven performance of Bastion's strategies [5]

Core Insights - Global exchange-traded product (ETP) assets remained resilient, holding above $200 billion for the second consecutive month in August, indicating strong investor appetite for regulated crypto products [1][3][5] - The divergence between Bitcoin and Ethereum products is attributed to temporary market phases rather than a structural shift, with Ethereum experiencing record inflows [6][9] ETP Market Dynamics - Bitcoin ETP assets under management closely mirrored the 6.5% decline in Bitcoin's price in August, showing stability compared to the more price-sensitive crypto-native investors [4][5] - Ethereum ETPs attracted nearly $10 billion in inflows over two months, driven by strong price performance and increased institutional interest [8][9] Investor Behavior - The current market cycle has seen a shift towards altcoins, with Ethereum leading the charge, while Bitcoin's dominance remains intact [7][11] - Altcoin ETPs have increased by 30% this year, indicating a growing risk appetite among investors for single-asset exposure rather than diversified basket products [10][11] Future Catalysts - Potential catalysts in the ETP space include the approval of additional crypto assets by the US SEC, which could lead to new staking products and broaden the range of offerings [2][12] - The evolution of yield strategies in Europe, particularly the integration of decentralized finance (DeFi) into structured products, is being explored by companies like Fineqia [2][13][14]

Group 1 - Institutional adoption of cryptocurrency is still in early stages, but momentum is building, particularly following Bullish's August IPO and the passage of the GENIUS Act, which has provided regulatory clarity for large investors [1][2] - The Chicago Mercantile Exchange reported record institutional open interest in crypto derivatives, with institutions holding approximately 25% of bitcoin ETPs, and an EY survey indicated that 85% of firms either currently allocate to digital assets or plan to by 2025, driven by regulatory factors [2] - Ether (ETH) and Solana (SOL) are identified as primary investment vehicles in the crypto space, with Ether rising nearly 20% and Solana increasing 17% since the GENIUS Act passed [3] Group 2 - Bullish has emerged as an institutional proxy in equities, with its shares climbing 45% since the IPO, and potential for further growth if it secures a BitLicense later this year [3] - JPMorgan maintains a neutral rating on Bullish shares with a price target of $50, while the stock was trading at $54.50 on Wednesday [4]

Core Insights - Digital asset Exchange Traded Products (ETPs) have reached a record-breaking $200 billion in assets under management (AUM) as of July, driven by strong market performance and increasing institutional demand [1][2] Market Performance - The strong performance of major digital assets, including Bitcoin reaching its all-time high and Ethereum trading near its peak, has significantly contributed to the increase in AUM [2] - Ethereum ETPs saw a remarkable 87% surge in AUM in July, with Ethereum's price increasing by 48% during the month and over 25% in the first weeks of August, leading to a price doubling over six weeks [3][4] Institutional Interest - There has been a notable rise in interest from institutional investors, particularly in digital asset treasury strategies, with Ethereum and Bitcoin being key focuses [4] - Since early 2023, AUM for crypto ETPs has increased tenfold, indicating a rapid maturation of the market, with a fourfold increase in AUM and a 50% rise in the number of products listed worldwide following the approval of Bitcoin and Ethereum ETFs [6] Investor Behavior - The decline in Bitcoin dominance by about 8% in the last four weeks suggests a shift in investor risk appetite, typical during "alt seasons" where altcoins outperform Bitcoin [5] - Altcoin-linked ETPs have outperformed basket products, reflecting changing dynamics in investor preferences [5] Regulatory Environment - Improving regulatory clarity is expected to lead to the introduction of new digital asset ETP products, particularly in the US, where Bitcoin and Ethereum spot products have recently been approved [7] - In Europe, the focus is shifting towards diversifying yield sources and optimizing yield, with expectations for a new wave of yield optimization products [8]