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Crypto Investment Products Sees Lowest Trading Volumes in Two Years

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VOC, Voice of Crypto, BTC Price Analysis

Key Insights:

  • Crypto investments trading volume falls below $100 million for the first time in two years.
  • The fall in trading volume is attributed mainly to the crypto winter
  • Coinshare and Cryptocompare reports show that institutional investors prefer Bitcoin & Ethereum.

Reportedly, the daily aggregated trading volume of institutional cryptocurrency investment products plunged to a two-year low.  This drop is primarily due to the crypto winter that has seen various assets losing their price value.

Institutions Prefer BTC & ETH

According to Coinshare’s report, digital assets investment products had about $5 million in cumulative outflows. This is regarded as an apathetic period and has been on since September 2022. 

The report revealed that investment product volumes dropped to $758 million during the week. This volume is considered the lowest since October 2020. 

The current investment product volume is also low compared to the weekly average volume of $7 billion recorded last year. This time last year, the crypto had an impressive weekly average volume when the market was on an uptrend. 

The report also shows that Bitcoin investment products saw a minor inflow of $4.6 million. This is considered a weekly gain and the sixth consecutive one in the period under review. Meanwhile, short Bitcoin investment products recorded outflows of $7.1 million.  

The report spotlighted other digital assets like Ether (ETH) and Ripple (XRP). 

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The investment products saw outflows for a three-week long period at $2.5 million. The total outflows were $11.5 million (considering the merge). This ETH outflow represents just 0.2% of assets under management.

On the part of XRP, the inflow volume stood at $8 million. Even though it is considered one of the lowest in the last two years— it is a better record since the lawsuit between Ripple and SEC started. 

In 2022, Bitcoin funds saw a net worth of $296 million worth of inflow. On the other hand, Ether funds have seen a net worth of $371.2 million outflow.

Crypto Trading Volume Plunges Below $100 Million

The CryptoCompare’s report showed that Assets under management (AUM) had a “painful September.” The AUM has, however, soared by 1.76% to $22.9 billion in October. 

Source: CryptoCompare

Source: CryptoCompare

Since November 2021, the average daily aggregate volume of all crypto investment products has dropped by 34.1%. It stood at $62.3 million in October after a brief rise of 0.39% in May. 

The report shows that asides from September 2020, October 2022 marks the second time the average trading volume has fallen below $100 million.

Conclusion

The prolonged bear market hurts the crypto investment trading volumes. Since September 2020, this is the first time in two years that the trading volume has dropped below $100 million. 

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Both Coinshare and Cryptocompare’s report shows that there is an institutional preference for BTC. This is because Bitcoin has a relatively stable and longer track record during the bear market.

 

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