Does CoinShares data signal a reversal in smart money sentiment?

GB Market Commentary 26/09/2022

by Marcus Sotiriou

The macroeconomic environment remains uncertain as fears of a global economic slowdown have increased after the Federal Reserve’s and Bank of England’s rate hikes last week. This has caused Bitcoin to struggle to gain any upside momentum and continues to be rejected by the 4 hour trend and 7-day moving average.

Despite this persistently negative sentiment amongst investors relating to the global economy, CoinShares Short Bitcoin investment product has seen the first outflow in 7 weeks totalling $5.1 million.

Also, crypto-focused investment products saw inflows totalling US$8.3m last week. Furthermore, investors dabbled into Ethereum, which saw inflows of $7 million last week. This marks the first week after the merge which showed inflows for Ethereum, after a run of 4 consecutive weeks of outflows.

This data from CoinShares could indicate the beginning of a change in sentiment amongst institutional or High-Net-Worth investors, however, the volume remains very small which indicates that investors are remaining cautious. When inflow volumes pick up to levels comparable to that of the bull market from last year, then we can be more confident of a change in investor sentiment.

Institutions continue to gain exposure in blockchain related investments privately as Web3 Metaverse Company Hadean has raised $30 Million in a Series A funding round, which is backed by Epic Games (a gaming giant) and Tencent (an entertainment giant). Hadean is aiming to provide metaverse gaming scaling tools. JPMorgan released a report recently estimating the metaverse gaming market in China could reach $100 billion, which indicates how much upside potential there is for this industry.