Institutional inflows to altcoin investment products as Cardano have continued to increase this past week
In the Digital Asset Fund Flows Weekly report on August 30, institutional asset manager CoinShares identified overall inflows of $24 million to altcoin-based investment products. In which, Ethereum and Cardano continue to dominate inflows to institutional crypto investment products while demand for BTC weakens.
Institutions remain bullish on Cardano and ETH while BTC outflows persist
The inflow marks the second consecutive week of inflows into altcoin funds, with investments in altcoin products up 14.3% from the previous week’s $21 million. ETH is an asset favored by institutional investors, with ETH-based products having a weekly inflow of $17.2 million.
Digital Asset Fund Flows Weekly | Source: CoinShares
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%. It is known that Cardano-based institutional funds posted a 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.
One of the reasons for the increase in inflows to Cardano is attributed to the anticipation for the “Alonzo” upgrade on September 12 that will see the project launch smart contract functionality for the first time. In addition, the two Polkadot and Solana-based funds also saw investment flows of $1.5 million and $2.7 million, respectively. Solana has now surpassed Bitcoin Cash in terms of assets under management in related funds with $16 million, ranking 9th in AUM with BCH funds in 10th place.
“Despite the bullish momentum surrounding altcoins, 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”, the report stated.
Institutional asset managers currently represent a total of $56.8 billion in AUM – as the last week’s slight decline in AUMs across the industry is due to continued cash outflows from Bitcoin-based products. Looking at fund issuers activity, CoinShares’ own Bitcoin fund suffered the heaviest loss in the past week with outflows of $14.5 million. ETC issuance saw the largest inflow at $14.1 million.
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