September 18, 2021

Institutions remain bullish on Cardano and Ether while BTC outflows persist

Institutional inflows to altcoin investment products have continued to increase this past week, but the same cannot be said for Bitcoin.

In its Digital Asset Fund Flows Weekly report on Aug. 30, institutional asset manager CoinShares identified overall inflows of $24 million to altcoin-based investment products. The capital flows mark the second consecutive week of inflows to altcoin funds, with investments into altcoin products increasing by 14.3% compared to last week’s $21 million.

Ether was the favored asset among institutional investors, with ETH-based products posting a weekly inflow of $17.2 million. The report noted that products tracking Ethereum and other altcoins now represent 32% of the sector’s total assets under management (AUM) — just 3% shy of mid-May’s record of 35%.

Cardano-based institutional funds posted record weekly inflows with $10.1 million, representing 32% of the week’s total altcoin inflows. Cardano-based instruments now hold 0.15% of the capital locked in crypto investment products combined.

The surge in Cardano inflows is attributed to anticipation for its Sept. 12 “Alonzo” upgrade which will see the project launch smart contract functionality for the first time.

Polkadot and Solana-based funds also saw inflows with $1.5 million and $2.7 million respectively. Solana has now surpassed Bitcoin Cash for assets under management in related funds with $16 million, ranking ninth in terms of AUM with BCH funds in tenth.

Despite the bullish momentum surrounding altcoins, the report noted that Bitcoin products continue to see outflows, with a loss of $3.8 million for the period. As such, Bitcoin products have posted outflows for 14 of the past 16 weeks.”

CoinShares estimates that institutional asset managers currently represent an AUM of $56.8 billion combined — attributing the slight week-over-week drop in sector-wide AUM to persistent outflows from Bitcoin-based products.

Related: Bitcoin investment products still suffering outflows despite price recovery

Looking at the performance of fund issuers, CoinShares’ own Bitcoin fund saw the heaviest losses this past week with an outflow of $14.5 million. ETC Issuance saw the largest inflow at $14.1 million.