Observing the inflow and outflow from investment funds can provide insights into the market expectations of fund managers regarding the future of the crypto market.
According to CoinShares’ statistics, investment funds had an inflow of $136 million last week, maintaining a three-week streak of inflows totaling $470 million. This comes after nine consecutive weeks of outflows of equivalent value. Additionally, the past three weeks have witnessed remarkable inflows surpassing the entire previous year.
In the past three weeks, the market has received news regarding a Bitcoin ETF, which likely contributed to the fund managers’ projections and decisions.
Compared to the price of Bitcoin, in the past three weeks, BTC has not been able to close the daily candle above the $31,000 level. The fund flows indicate that they are expecting BTC to break this resistance and continue to rise at least in third quarter of 2023.
If we examine the allocation of this Inflow amount to different cryptocurrencies, we can see where the trust of the funds is placed. The answer is very clear in the chart below, and that is Bitcoin.
During most of the time, Bitcoin consistently holds a large proportion in the funds’ portfolio (represented by the blue color). However, in the past 3 weeks, the proportion of Bitcoin has exceeded the average level. This partly explains why Bitcoin Dominance has continuously maintained above 51.61% in the past 3 weeks.
Thus, the optimism from the funds is returning at a much faster pace and with greater intensity compared to the past year.