China FUD led institutional investors to buy the dip
With China’s latest FUD, it is reported that institutional investors were buying the dip as the digital assets investment products have generated $95 million worth of inflows in the previous week.
CoinShares Weekly Report on Digital Asset Fund Flows dated September 27 reveals that a surge in dip-buying has helped drive a sixth consecutive week of inflows for institutional crypto investment products.
Between September 20 and 24, there was a $95 million worth of inflows marking a 126 per cent weekly inflows increase. Within the period, Bitcoin and Ether investment products had been leading with $50.2 million and $28.9 million worth of inflows, respectively.
While BTC investment products saw outflows in 13 of the past 17 weeks, during September, positive sentiments increased towards the digital asset. BTC inflows increased by 234 per cent week-over-week.
As of this week, the institutional appetite for altcoins continues to appear strong, with products like Cardano, Solana and Polkadot registering inflows of $2.6 million, $3.9 million and $2.4 million, respectively. Multi-asset funds have also seen inflows of $6.4 million in the last one week.
The People’s Bank of China (PBoC), on September 24, published a memo announcement of a ban on all crypto transactions triggering an 8 per cent dip in the price of Bitcoin (BTC) alongside a broader pullback across the crypto market.
The PBoC’s updated measures, initially published on September 3, has outlined that financial institutions and payment firms are completely blocked from assisting or providing any crypto-related services to them.
While Chinese FUD had impacted crypto markets, historically speaking, it has also proven to be a catalyst for surgeon prices in subsequent months that followed the announcements.
In September 2017, the Chinese government had barred crypto exchanges from offering any service to users in the country, while simultaneously blocking its citizens from participating in initial coin offers. After the double-ban, the price of BTC had recorded a historic climb from the $4,000 range to the then all-time high of around $20,000.