Bitcoin funds are raking in fresh money, while altcoin funds are suffering

• BTC-focused investment funds received $125.9 million in inflows in the week ending June 3.
• $100 million in inflows, implying that fresh money dedicated to bitcoin funds compensated for losses other cryptos (altcoins)
• Ethereum funds continued their downward trend, recording nine weeks of outflows.

Bitcoin (BTC) funds saw inflows for the second week in a row and outperformed other digital-asset funds as investors grappled with an uncertain outlook for crypto markets.

According to the most recent data from digital-asset fund provider CoinShares, bitcoin-focused investment funds received $125.9 million in inflows in the week ending June 3, bringing the total since the beginning of the year to $506 million in net inflows. In total, crypto funds received almost $100 million in inflows, implying that fresh money dedicated to bitcoin funds compensated for losses in non-bitcoin funds, or other cryptos (altcoins).

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According to James Butterfill, head of research at CoinShares, the outperformance indicates that “investors are flocking to the relative safety of bitcoin.”

As financial markets respond to stubbornly rising inflation, interest-rate hikes by central banks around the world, and growing recession fears, some investors have curtailed their exposure to risky assets, including cryptocurrencies. Bitcoin, as the cryptocurrency with the oldest history and the highest market value, is viewed as less hazardous by digital-asset investors than most other tokens. This year, Bitcoin’s “dominance” – its proportion of the overall sector market value – has increased.

BTC traded in a range of $29,000 to $32,000 last week, and was changing hands at $31,259 at the time of publication.

Ethereum funds continued their downward trend, recording nine weeks of outflows. Investors withdrew $32 million from funds that manage the second-largest cryptocurrency, ether (ETH), bringing the year-to-date outflows to $357 million. The withdrawals resumed in December 2021, and they account for a very tiny share (7 percent) of the overall amount of assets under management, according to the report.

Inflows into short-bitcoin funds, which aim to benefit if bitcoin’s price falls, totaled $1.3 million.

Multiasset funds, which manage multiple cryptocurrencies, received $4.3 million in inflows, increasing total inflows to $201 million since the beginning of the year, highlighting investor need for diversification.

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According to the regional breakdown, last week’s flows were primarily from the Americas, which received $88 million. In comparison, European funds had only $11 million in inflows this week, continuing a trend in which “European investors have been much more bearish this year so far,” according to the study.

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