Crypto Industry was on a wild streak of record inflows for 17 weeks up until December. According to the data provided by CoinShares, institutional capital inflows stopped last week. Although, this does not necessarily mean a bear market to follow, outflows are not necessarily a good sign either. Continue reading as we go over some of the contributing factors and what the future might hold for the crypto industry.
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Down but not Defeated
According to the data provided by digital asset manager CoinShares, the crypto industry saw a total of $142 million in outflows. This is for the first time in 17 consecutive weeks to have negative inflows. We have previously reported on the record inflows. This time around, a strong market pullback managed to turn the bullish trend red.
“Digital asset investment products saw outflows totaling $142 million, the first outflow following a 17 week run of inflows, and the largest weekly outflow on record. The largest previous outflow on record was early June 2021 where weekly outflows totaled $97 million.”
Looking at the data, a massive share of the outflows belonged to Bitcoin and Ethereum. CoinShares reported a total of $89.2 million and $63.6 million institutional capital pullback for BTC and ETH. What is interesting, is that Solana and Polkadot still had inflows of $6.7 and $2.5 million.
Crypto Industry in Slump
It seems like following October, the crypto market lost its bullish magic for a while. Only days before 2022 begins, the market has not recovered from the December market crash.Perhaps the most important reason for this bear market is the US Federal Reserve statement on tapering. It is also worth mentioning that almost all risk assets suffered from this news and crypto was not alone.
On the other hand, legal uncertainty and concerns over taxing are some other reasons for this plunge. But again, uncertainty is not a doorway to pessimism. In that regard, even with tax imposed and regulations issued, the market can still grow.
After all, we should consider that the yearly crypto industry inflows are still at a record high. 2021 had a total of $9.2 billion compared with $6.7 in 2020. Remember 2020?
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