In the past week, digital asset exchange-traded products and funds experienced a significant outflow of $600 million, marking the largest outflow since March 22, as detailed in a report released on June 17. The latest CoinShares “Weekly Asset Fund Flows” report revealed that the majority of the outflows came from Bitcoin (BTC) investment vehicles, which saw $621 million exiting on a weekly basis. On the other hand, short Bitcoin funds received $1.8 million in inflows for the week.
The report attributed the capital flight from fixed-supply assets like Bitcoin to a more hawkish outlook from the Federal Reserve, signaling a commitment to maintaining high interest rates. Despite this, altcoins showed resilience with Ether (ETH) investment vehicles receiving $13.2 million in inflows, LIDO investment products attracting $2 million, and XRP (XRP) investment products gaining $1.1 million. Additionally, BNB (BNB), Litecoin (LTC), Cardano (ADA), and Chainlink (LINK) investment products also experienced minor inflows during the week.
However, the inflows into altcoins were not enough to counter the trend of outflows and sell-offs, leading to a decrease in total digital assets under management from $100 billion to $94 billion throughout the week.
In terms of institutional adoption, despite the initial excitement surrounding the launch of Bitcoin exchange-traded funds (ETFs) in the United States, experts believe that institutional adoption of digital assets is still in its early stages. Marc Degen, co-founder of blockchain firm Trust Square, emphasized that corporate adoption of Bitcoin is still at a “beginner level,” citing Bitcoin ETF inflows as evidence. Degen highlighted that Bitcoin ETFs have accumulated between $60 billion and $70 billion so far, with global total assets under management reaching $100 billion in June.
To put this into perspective, Degen compared total digital asset fund inflows to capital flows into JPMorgan, noting that the banking giant saw $489 billion in net new client inflows in 2023. This comparison highlighted the significant gap between capital inflows into traditional financial institutions and the Bitcoin investment fund ecosystem.
Both Degen and Franklin Templeton CEO Jenny Johnson believe that institutional adoption of digital assets is still in its early stages, with a second wave of robust institutional interest and capital deployment expected to arrive in the future.
Finally, the question of whether the NSA created Bitcoin has been a topic of debate in the cryptocurrency world.