Institutional crypto managers are holding a record amount of digital assets, despite a decline in US inflows, CoinShares says
A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course’s graph Chesnot/Getty Images
Total assets under management held by crypto managers have reached a record $57 billion, according to digital asset investment house CoinShares.
US investors appear less keen on crypto, but European and Canadian appetite remains strong, the report shows.
Bitcoin trading volume also declined by $387 million last week, it said.
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Institutional crypto managers are now managing a record $57 billion in assets, according to digital asset investment firm CoinShares. Last week, net inflows totalled $73 million as minor outflows were offset by incoming investments, a weekly report by the company showed.
Grayscale Investments, the owner of the world’s largest bitcoin fund, still manages over three quarters of that record total, with around $44.6 billion, well ahead of CoinShares, which has the second-largest holding, with just shy of $5 billion in assets under management.
The vast majority of inflows in the latest week went into bitcoin, totaling $85 million. Ethereum’s ether token and Polkadot were left far behind in second and third place respectively, according to the report. Ether saw inflows of $8 million and Polkadot, $2 million. Volumes traded in bitcoin-based investment products eased back by $387 million to $713 million a day, compared to a daily $1.1 billion for 2021.
“This has not been reflected overall for bitcoin, where trading volumes on trusted exchanges remain at $11.8 billion per day,” CoinShares said in its weekly report.
Bitcoin’s value has declined in recent weeks and is currently trading around $54,945. It traded at a record above $61,000 earlier in March.
Crypto analysts are increasingly speaking of the potential for a steeper correction in price and some have said indicators are pointing to bitcoin being at a later stage in the bull market.
Other digital assets have followed a similar pattern in the last few months. Following the price highs that a number of digital assets reached in February and their recent volatility, there has been a decline in investor appetite, CoinShares said. However, “there seems to be a regional divide, with declining appetite from the United States and sustained appetite from Europe and Canada,” the report added.
The volatility of digital assets is something that does concern banks, regulators and governments. Federal Reserve Chairman Jerome Powell stated on Monday that cryptocurrencies are too volatile to replace the dollar and the SEC has not yet approved any bitcoin ETFs, despite the agency’s cryptocurrency commissioner stating that this has caused them difficulties.
Bitcoin may be entering the later stage of a bull market, crypto analysts say, as talk of a price plunge grows
Bitcoin has soared by more than 700% in a year. Dado Ruvic/Getty Images
Bitcoin conditions are “similar to the second half or later stages of a bull market,” Glassnode said.
Analysts pointed to signs of long-term holders spending coins and to a reduction in big wallets.
Talk of a bitcoin price plunge has grown; a crypto entrepreneur said there could be a 90% drop.
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Bitcoin may be entering the second half or later stages of a bull market, crypto analysts at Glassnode said on Monday, as nervousness grows in some quarters about a plunge in the price.
Glassnode’s weekly analysis found that there had been a pickup in “wealth transfers” from long-term bitcoin holders to newer speculators, which the company said was reminiscent of market peaks.
The report said bitcoin bull markets eventually reach a “euphoric top” that materializes as big holders increasingly spending their coins to realize profits.
Glassnode estimated that long-term bitcoin holders had reactivated about 9% of supply so far in 2021 by spending coins, though this was below the 17% reactivation before the market’s crash in 2017.
“These studies suggest conditions are similar to the second half or later stages of a bull market,” Glassnode said.
The bitcoin price was down 6% on Tuesday, to $54,294, well off a high of $62,000 earlier in March but still up by about 700% from a year ago.
Glassnode also said on Tuesday that the biggest players - wallets with 1,000 to 10,000 bitcoins - had cut their holdings by 307,000 bitcoins since December.
Read more: Hedge funds are ramping up bets against Chamath Palihapitiya’s SPACs and have already taken home $40 million this year. Here’s a detailed look at the wagers they’re making.
Timothy Peterson, an investment manager, tweeted that falls in big holdings “are often but not always associated with bear markets.”
On Monday, Bobby Lee, the founder of the crypto exchange BTCC, told CNBC that 2021 would be a bull market for bitcoin, of the sort that comes around every three or four years. He said the bitcoin price could go as high as $300,000 this year.
But Lee said that the “bubble” was likely to pop. “People should be aware that it could fall as much as 80% to 90% of its value from the all-time peak,” he said.
However, many bitcoin advocates have pointed to growing institutional interest as a reason bitcoin is unlikely to crash as it has in the past. Visa, Morgan Stanley, and JPMorgan are some of the latest big names to get involved.
Snoop Dogg and Lionel Richie jump in on NFT craze as Crypto.com launches a token marketplace
Snoop Dogg (second from right) and Lionel Richie (third from right) will produce NFTs for the platform Kevin Mazur/Getty Images
Snoop Dogg and Lionel Richie have signed up to produce NFTs for Crypto.com’s new marketplace.
It is the latest sign of the craze for non-fungible tokens, a form of digital collectors' item.
Earlier this month, Beeple sold an NFT artwork for $69 million.
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Snoop Dogg, Lionel Richie and Boy George are moving into the world of non-fungible tokens, having signed up to produce work for cryptocurrency exchange Crypto.com’s new NFT marketplace.
It is the latest example of the craze for the crypto technology, following the sale of a $69 million NFT artwork earlier in March and the popularity of the NBA’s Top Shot token market.
Crypto.com - a cryptocurrency exchange with more than 10 million global users - will launch an NFT platform on Friday as it seeks to capitalize on the trend, the company said on Tuesday.
It will feature sports, art and music NFTs from the likes of the Aston Martin Cognizant Formula One racing team, online artist BossLogic, and TikTok sea shanty star Nathan Evans.
Lionel Richie - one of the best selling music artists of all time - will team up with digital artist Klarens Malluta to produce an NFT for cryptocurrency exchange’s invite-only platform.
In a statement released by Crypto.com, Richie said he is “looking forward to collaborating with [Malluta] on a digital piece and with a little ‘All Night Long’ in this new medium.”
Snoop Dogg, who has previously tweeted enthusiastically about meme cryptocurrency Dogecoin, will also produce work for the platform. UK 1980’s pop icon Boy George will also create content for the platform, saying: “Digital art is a new emotion.”
Non-fungible tokens, or NFTs, are a special class of digital assets that cannot be exchanged with one another for equal value, or broken down into smaller bits. They often operate as a type of collectors' item and cannot be duplicated.
They are the hottest new thing in the crypto world, and grabbed global attention earlier in March, when digital artist Beeple sold an NFT for $69 million, making him one of the three most expensive living artists.
Crypto.com said it is trying to create “the most user-friendly NFT-buying experience.”
“At launch users will have the option to 1-click buy using their credit or debit card. Any collector, or fan, will be able to acquire, trade, and resell NFTs through the platform, regardless of whether or not they are a Crypto.com user.”