Crypto Winter Breaks, and the Cool Contenders Slip Back In
It feels like a movie plot: the crypto climate was frosty until June, and now there are signs that the chill has started to melt. Bitcoin, the headline volatile, seems to be finding its footing again. What drives this slight thaw? It’s the cash that’s sneaking back into low‑risk crypto ETFs.
Money Starts Warming the Market
Investors, both institutions and retail, are nudging their money toward listed crypto funds – not the whole universe, but the corner that most people actually tap into.
- Last month’s flows turned positive, with a weekly average inflow of $66.5 million (S$91.5 million). In April, those funds saw a weekly outflow of $49.6 million.
- CryptoCompare’s data backs up the shift.
Ben McMillan, chief investment officer of Arizona‑based IDX Digital Assets, says, “It’s mainly institutional money, plus some retail who recognise the pain is already behind us. We’re closer to the bottom than the top.”
“If you’re getting into crypto at these levels, a little near‑term volatility could be worth the long‑term payoff,” he added. “A lot of institutional players are starting to look at crypto as a growth engine.”
Are We Just Brewing a Small Bubble?
It’s uncertain if this gentle inflow will keep building, or if the trend will spread across the whole market. Remember how crypto shook its tail feathers after fears of global tightening and rising inflation? Bitcoin is down about half from its November peak, a third below 2022’s levels, and has been stuck near $30,000 for a month.
Yet, the data tells us something encouraging: investors are returning – but they’re leaning toward exchange‑traded products (ETPs) for their liquidity and perceived safety.
ETFs Are Finally Acing the Game
- ProShares Bitcoin Strategy ETFs grew 6% last week. Global X Blockchain & Bitcoin Strategy and VanEck Bitcoin Strategy ETFs each climbed over 3%.
- ProShares’ Bitcoin fund saw a massive $127 million outflow in April.
- At the start of June, global Bitcoin ETP holdings hit a record of 205,008 BTC – according to Norwegian research firm Arcane Research.
Vetle Lunde, an analyst at Arcane, remarks, “This is a promising sign for what’s to come.”
Selective Investments: The New Norm?
Bitcoin is the resident hero. Ethereum‑focused funds and other crypto ventures still wrestled with outflows, underscoring investors’ prudence.
All in all, the early signs are that the re‑entry of cash into Bitcoin‑centric ETFs could signal a shift from a frosty slump to a more vibrant, albeit cautious, environment. Whether it upgrades to a full‑blown hot summer or remains a cool, controlled flicker, stays to be seen. In the meantime, keep your eyes on the cold fronts turning hot, and enjoy the waves of the crypto winter thaw.
Still in the red
Crypto Funds Feel the Chill: 2022 Losses are on the Rise
It’s a roller‑coaster out there for digital‑asset investors. While a handful of funds might be picking up the sun, the bulk of them are splashing around in the ice—flatlining or even sinking.
Snow‑balling Losses
- US digital‑asset funds have lost a whopping 46 % on average in 2022, according to Morningstar.
- May alone saw a 22 % slump for these funds.
May’s Icy Chill
- All the listed digital‑asset investment products tracked by CryptoCompare went down in May.
- The most dramatic drop was Grayscale’s Digital Large‑Cap Fund, with a 38.5 % fall.
Jack McDonald, CEO of PolySign (the big‑name digital‑asset custody provider for institutions), explains:
“Bitcoin has been range‑bound, mirroring the broader market, and investors are hunting for a bottom, but they’re unsure where it’s hiding.”
Grayscale Bitcoin Trust Sparks the Pain
- With over $19 billion in assets, it’s the biggest Bitcoin fund on the block.
- Shares are trading at a 29 % discount to net asset value—the steepest ever and a clear sign of low demand.
Will Crypto Funds Warm Up?
Even after the slight May uptick, many analysts predict that inflows into crypto funds will stay low until macro‑economic and regulatory uncertainties clear up.
“We’re waiting for a high‑conviction bid to return to the markets,” says McMillan at IDX. “There’s still a lot of wood to chop on the macro front.”
Keep Your Eye on the Floor
Think this write‑up missed something? Good stuff, like a call by an Ethereum co‑founder—just trust us, you won’t need to click a link to find that.
But the takeaway is clear: the digital‑asset landscape remains frosty, with investors hoping for a temperature lift soon.
