Bitcoin institutional investor sentiment remains negative, outflows continue

Last Updated: 24 August 2022

Sentiment among institutional investors towards bitcoin has been dramatic for weeks. For the past week, bitcoin had to record an outflow of $15 million in what marked the third consecutive week of outflows.

Only short bitcoin in the green

Only the US short-bitcoin fund posted a small plus of $0.2 million, but that is basically not a positive signal from institutional investors. Therefore, it seems that, with the market’s decline, the institutional public’s interest in bitcoin has also fallen sharply.

Just on the 4th of August news broke that BlackRock has partnered with Coinbase to introduce their institutional clients to bitcoin. It is possible that they are already buying heavily, but this is not at all reflected in the price and sentiment among the rest of the institutional market.

Coinbase Prime is linked to Aladdin, BlackRock’s trading platform. There, investors from the world’s largest investment fund have the opportunity to invest in bitcoin. However, it is questionable whether there is much demand for this now, given bitcoin’s price performance.

Big money also suffers from emotions

The behaviour of the institutional market shows that even big money is not foreign to the human condition. They too allow themselves to be influenced by emotions and the issues of the day. When the bitcoin price is doing well, money flows into bitcoin investment products and vice versa.

Having a solid stock market does not necessarily mean that you are better able to trade objectively. Despite the negative sentiment at the moment, the collaboration between BlackRock and Coinbase is certainly a promising development.

Once the market picks up, it means that a huge mountain of capital suddenly has the opportunity to buy bitcoin. Let it be clear that this possibility was not initially available to BlackRock’s clients. For that, they had to take their money out of Aladdin and invest it through other means.

  • Ivan Brightly

    Ivan Brightly is a leading cryptocurrency analyst and author with over 5 years of experience in the blockchain and digital asset space. He previously served as a senior analyst at a major cryptocurrency hedge fund where he led quantitative research and trading strategy development.

    Ivan holds a Master's degree in Finance from the London School of Economics and a Bachelor's in Computer Science from Stanford University. He is frequently invited to speak at fintech and blockchain conferences worldwide on topics spanning cryptocurrency trading, blockchain technology, and the future of digital assets.

    Ivan's commentary has been featured in several major finance and technology publications including Forbes, Bloomberg, and CoinDesk. He is considered one of the most insightful voices analyzing new developments in the cryptocurrency and blockchain industry.

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