Institutional investors see the latest plunges in cryptocurrency market as an opportunity to accumulate further on digital assets. The highly volatile past few weeks or even months has provided a good buying opportunity for whales. According to CoinShares, a notable increase of inflows in the past three weeks is indicating institutions are buying crypto at discount prices.
Increased Inflows in Times of Trouble
Generally speaking, BTC investment products have seen outflows in 13 of the past 17 weeks. However, BTC and ETH have respectively $50.2 million and $28.9 millions of inflows between September 20 to September 24.
Other altcoins such as Solana, ADA and Polkadot have also had massive inflows coming their way.
Institutional Investors in a Regulatory Limbo
It seems like as of September of 2021, China has completely washed their hands off cryptocurrencies. Declaring all crypto transactions illegal, China is clearly bearish on crypto.
In the meantime, considering the increased inflows, one can safely assume that some institutions have extremely bullish predictions on the future of cryptocurrencies. As they waste no chance to buy the dip, be it amidst the sharpest plunges ever recorded.
Inherently, the series of crypto bans coming from China have been consistent yet impotent. However, the People’s Bank of China threw everything they had at cryptocurrencies, as everything about them is no illegal. It is still unclear how the Chinese institutional investors can and will surrender their digital asset investments. It could certainly bear a significant mark on the market.
On the other side of the pond, the United States or at least the domineering party regarding financial decisions (democratic party) is signaling strict regulations coming toward crypto.
It could be another make it or break it moment for cryptocurrencies. the severity and extent of the upcoming regulations an deeply affect institutions. In that regard, by both buying or not buying cryptocurrencies, they are making big financial wagers.
Life After the FUD
Taking a look at the past, we can see a recurring pattern of sharp plunges following extreme fear, uncertainty and doubt. However, when the dust settles, every single time, the plunge is followed by sharp bull runs coming a few weeks or months after the decline. Considering it as a natural pattern of correction and recovery, it could be another reason for the increased inflows of cryptocurrencies.
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