Investors
Pile
Back
Into
Bitcoin
Digital
asset
investment
products
saw
their
largest
inflows
since
July
2022,
according
to
the
latest
weekly
fund
flows
report
from
crypto
intelligence
firm
CoinShares.
$117
million
in
capital
entered
the
crypto
investment
product
space,
with
Bitcoin
dominating
and
accounting
for
$116
million
of
the
inflows.
Short
Bitcoin
products
also
saw
$4.4
million
in
inflows,
taking
the
monthly
inflow
to
short
Bitcoin
products
to
$30
million.
But
this
is
still
some
way
off
the
month-to-date
inflow
into
long
Bitcoin
products,
which
was
last
at
$125
million.
According
to
CoinShares,
total
assets
under
management
have
jumped
to
$28
billion,
up
43%
from
November
2022’s
post-FTX
collapse
lows,
mostly
due
to
price
appreciation
of
crypto
assets.
Trading
volumes
are
also
recovering,
the
crypto
intelligence
firm’s
report
revealed.
Products
worth
$1.3
billion
changed
hands
over
the
course
of
the
week,
17%
above
the
year-to-date
average.
This
remains
only
about
1.4%
of
the
trading
volumes
seen
across
trusted
cryptocurrency
exchanges,
CoinShares
noted.
Investors
also
continued
to
prefer
“select
investments”,
Coinshares
stated,
pointing
to
the
fact
that
multi-asset
investment
products
saw
outflows
for
a
ninth
consecutive
week.
Multi-asset
funds
saw
outflows
of
$6.4
million
on
the
week,
taking
the
month-to-date
outflow
to
$16
million.
Upcoming
Macro
Risks
to
Put
“Bitcoin
Has
Bottomed”
Thesis
to
the
Test
CoinShares’
latest
report
shows
that
institutional
investors,
who
tend
to
favor
crypto
investment
products
over
holding
the
underlying
spot
asset,
are
finally
starting
to
get
involved
in
the
rally
that
has
seen
Bitcoin’s
price
surge
40%
this
month.
Prior
to
last
week’s
surge
in
Bitcoin
investment
product
buying,
monthly
inflows
were
only
a
minuscule
$9
million.
The
shift
in
sentiment
reflects
a
growing
narrative
amongst
crypto
investors,
traders,
analysts
and
commentators
that
the
bear
market
that
characterized
2022
might
now
be
over.
That
narrative
will
be
put
firmly
to
the
test
this
week
–
a
number
of
crucial
upcoming
macro
events
could
trigger
volatility,
including
Wednesday’s
Fed
meeting,
Friday’s
US
jobs
report
and
the
latest
ISM
PMI
survey
results.
This
week’s
US
economic
data
is
expected
to
confirm
trends
we
already
know
are
happening
within
the
US
economy
–
that
the
economy
is
grinding
to
a
halt,
but
hiring
and
the
labor
market
remain
robust
enough
for
now.
The
real
wild
card
will
be
Wednesday’s
Fed
meeting.
Financial
conditions
have
eased
in
January
(US
stocks
are
up
while
US
yields
and
the
dollar
are
down)
on
expectations
that
after
Wednesday’s
widely
anticipated
25
bps
rate
hike
from
the
Fed,
there
won’t
be
much
more
tightening.
In
fact,
in
wake
of
recent
downside
US
inflation
data
surprises,
the
market’s
base
case
is
now
that
there
will
now
only
be
two
more
25
bps
rate
hikes
from
the
Fed
(including
Wednesday’s
hike).
But
that
goes
against
the
message
of
many
Fed
officials
in
recent
weeks,
some
of
whom
are
still
talking
about
rates
going
above
5.0%
(rather
than
peaking
just
below
5.0%,
as
markets
expect).
Fed
Chair
Jerome
Powell’s
message
in
the
post-meeting
press
conference
will
thus
be
closely
scrutinized.
If
Powell’s
remarks
spark
a
shift
in
Fed
rate
hike
expectations
towards
pricing
in
an
additional
rate
hike
in
2022,
that
could
trigger
a
big
drop
in
risk
assets
like
Bitcoin.
In
the
short
term,
Bitcoin
could
easily
drop
back
to
test
its
21-Day
Moving
Average
and
support
in
the
$21,600
level.
A
break
under
here
would
open
the
door
to
a
drop
back
towards
$20,000.
On-chain/Technical
Indicators
Still
Sending
Bullish
Signals
But
would
such
shock
be
enough
to
send
Bitcoin
back
to
or
below
2022’s
$15,500
lows?
On-chain
indicators
are
screaming
no.
As
discussed
in
a
recent
article,
an
increasing
confluence
of
indicators
(looking
at
eight
pricing
model,
network
utilization,
market
profitability
and
balance
of
wealth
signals)
tracked
by
Glassnode
are
suggesting
that
Bitcoin
could
be
in
the
early
stages
of
recovering
from
a
bear
market.
Alternative
indicators
are
also
flashing
bullish,
such
as
the
Bitcoin
options
market
and
miner
BTC
flows
to
exchanges.
Meanwhile,
analysis
of
Bitcoin’s
longer-term
market
cycles
also
suggests
that
the
world’s
largest
cryptocurrency
by
market
capitalization
might
be
in
the
beginning
stages
of
a
near-three-year
bull
market.