23.03.202207:46 Forex Analysis & Reviews: Investors flock from crypto market

Market participants are still not ready to consider bitcoin a safe-haven asset. Therefore, it is unlikely to advance in times of market turbulence.

There is also a high correlation with the stock market. It may even increase given the Fed's hawkish stance on monetary policy.

These assumptions were confirmed by the latest data on investment capital in the crypto market.

Major investors transfer large capital from crypto to safe-haven assets

The latest data has revealed that investors are transferring money from crypto and investing them in safe-haven assets. Over the past week, there was an outflow of $33 million from bitcoin-based assets. The latter has also been facing bearish pressure for some time.

Last week, the outflow of funds from BTC-backed products amounted to $47 million, logging the second week a decline. Investors also cut their share in ethereum-based products.

Outflows remain small even despite the bearish trend

The outflow from cryptocurrencies was mainly caused by digital asset service providers in North America. Due to weekly outflows, the total value of global digital assets in portfolios decreased slightly to $53.6 billion.

The CoinShares report unveiled that last week the total outflow totaled $47 million. The funds were withdrawn mainly by North American investors. At the same time, the outflow was 98%, while in Europe, there were no sharp changes.

Investors in North America abandoned crypto due to concerns about the regulation of the industry and the geopolitical problems. Since the escalation of the Russia-Ukraine conflict, there has been an increase in trading volumes by 160% and 150% in Ukraine and Russia, respectively.

What cryptocurrencies institutional investors sell

Bitcoin-based products saw record outflows during the first few weeks of 2022. Although the downtrend still persists, the outflow has been declining since the beginning of March.

Bitcoin and Ethereum account for more than 90% of global digital assets under management (AUM). Nevertheless, altcoins are gradually beginning to get more widespread in the global crypto ecosystem.

A similar situation occurred with institutional crypto inflows. During the last week, XRP, Solana (SOL), and Polkadot (DOT) grew significantly.

Crypto market cap exceeds $2 trillion

Bitcoin jumped above $43,000 on Tuesday, while Ethereum broke above $3,000. Crypto assets strengthened following the news that the total capitalization of the crypto market surpassed $2 trillion.

Apart from BTC and ETH, several other virtual coins advanced today. Cardano and Polkadot, two smart contract networks aspiring to take market share from ethereum, appreciated by 6.4% and 6.5%, respectively. Bitcoin Cash, EOS, and Ethereum Classic added 12.2%, 10.7%, and 9.7%, respectively.