Last week, digital asset exchange-traded products and funds experienced a massive $600 million in outflows, marking the most significant withdrawal since March 22, as per a report dated June 17. The latest CoinShares “Weekly Asset Fund Flows” report revealed that the majority of outflows came from Bitcoin (BTC) investment vehicles, with a total of $621 million flowing out during the week. On the other hand, short Bitcoin funds saw a modest $1.8 million in inflows.
The report attributed this capital flight from fixed-supply assets like Bitcoin to a more hawkish stance from the Federal Reserve, signaling the maintenance of high interest rates. Despite this, altcoins fared well, with Ether (ETH) investment vehicles receiving $13.2 million in inflows, LIDO investment products attracting $2 million, and XRP (XRP) investment products seeing $1.1 million in inflows. Additionally, BNB (BNB), Litecoin (LTC), Cardano (ADA), and Chainlink (LINK) investment products also witnessed minor weekly inflows.
However, despite the positive performance of altcoins, the outflows and sell-offs persisted, leading to a decrease in total digital assets under management from $100 billion to $94 billion within the week.
In terms of institutional adoption, experts believe that the interest in Bitcoin exchange-traded funds (ETFs) in the United States is just the beginning, and institutional adoption of digital assets is still in its early stages. Marc Degen, co-founder of blockchain firm Trust Square, compared the inflows into Bitcoin ETFs to the capital inflows into JPMorgan, highlighting that the banking giant experienced $489 billion in net new client inflows in 2023, surpassing the total inflows into the entire Bitcoin investment fund ecosystem.
In conclusion, while there is growing interest in digital assets, especially with the introduction of Bitcoin ETFs, institutional adoption is still in its infancy, with experts anticipating a second wave of robust institutional interest and capital deployment in the future.