The inflow of Crypto assets recorded one of the worst years in 2022. The year was one of market crashes and crashes that resulted in over $2 trillion off the market cap. Investors responded to this by pulling money out of the market, and institutional investors invested the lowest cumulative figure they have done since 2018.
Institutional Crypto Investors Beware
A report from CoinShares describes the year 2022 under review and how the crypto asset will perform. It shows that for the whole year, total inflows out to $433 million. Currently, the last time inflow from this class of investors was less than in 2018 when the figure was $233 million.
To put this into perspective, by 2021, the inflow of crypto assets will be $9.1 billion. This is when the bull market and greed is at its height. However, what this means is that between 2021 and 2022, inflows have dropped by more than 95%. Even the year before 2020 has been better when inflows reached $6.6 billion.
Interestingly, the outflow for 2022 is relatively lower than for 2018. The largest weekly outflow for the year was only 0.7%, an encouraging figure despite the decline in inflows. However, the big dump shows that institutional investors remain very wary of the crypto market, and it could continue until 2023 if there is no recovery.
Bitcoin still leads
It is worth noting where most of the inflows for crypto asset investments have disappeared for 2022. Once again, bitcoin leads the market, commanding more than half of the recorded value at $287 million. This is followed by multi-asset investment products which have gained a lot of support for the year with inflows of $209 million.
Short Bitcoin and other short products also performed well as they were launched in fierce market competition. The asset saw an inflow of $108 million throughout the year. However, short products only make up 1.1% of total assets under management, according to CoinShares.
BTC price trading above $16,800 | Source: BTCUSD on TradingView.com
There is also a high correlation between the decline in bitcoin prices over the year and the fall in inflows of crypto assets. By 2022, BTC lost about 63% of its value, dragging down the rest of the market. This significant decline has caused investors to become fearful and less money to go into the market.
However, changes in the price of bitcoin could see a quick change in the current inflow trend. Until then, it’s a waiting game.
Bitcoin is trading at $16,804 at the time of this writing. It is slightly down 0.32% in the last 24 hours but up 1.61% in the last 7 days.