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The Month of January Was Horrible for Crypto Investment Products
According to a Financial Times story citing data from crypto analytics firm CryptoCompare, institutional investors withdrew a record amount of money from bitcoin investment products last month.
In January, outflows averaged $61 million each week, indicating a shaky start to the first quarter of 2022. In comparison, the industry had a record-breaking $4.5 billion influx in Q1 2021.
Grayscale CEO Michael Sonnenshein blames the downturn on the Federal Reserve’s projected hawkish shift:
It’s important to note that there’s still significant investor demand for digital asset investment products, but institutions seemingly reacted to the Fed by offloading their positions.
Analysts predict at least three rate rises this year, with some expecting up to five by the beginning of 2023.
Grayscale Bitcoin Trust (GBTC) shares fell 29.8 percent on Jan. 21, according to YCharts data.
While the corporation intends to convert the fund into an ETF, it is quite doubtful that this will happen anytime soon.
The Securities and Exchange Commission of the United States postponed its judgment on Grayscale’s application earlier this week after rejecting multiple plans to create a spot Bitcoin ETF.
