Institutional Bitcoin sentiment flips bullish, but fund inflows dominated by Cardano, Solana

  • Institutional investors with long exposure to Bitcoin have reached a record high of $165 million.
  • Net exposure to Bitcoin for institutions has turned positive for the first time since Q2 2021.
  • Despite the recent retracement, the data suggests that the leading cryptocurrency could be awaiting further upside price movements. 

Data from Arcane Research suggest that institutions are now turning bullish on Bitcoin, as the leading cryptocurrency has recovered from the lows recorded in the past few months. Although the bellwether cryptocurrency is retracing from recent highs, the renewed positive sentiment from asset managers means there may be a strong conviction for further gains for BTC.

Bitcoin institutional open interest reaches all-time high

Bitcoin open interest from institutional investors on the Chicago Mercantile Exchange (CME) has been net positive throughout August, according to Arcane Research. The net exposure has been the highest long exposure at $91.6 million seen among asset managers since the beginning of this year. 

Bitcoin open interest with long positions from institutions has also reached an all-time high at $165.7 million, which indicates that asset managers believe that Bitcoin price still has room to surge higher.

Looking back at the trend in 2020, institutions were also net long following the recovery from the Bitcoin crash in March when the bull market was in anticipation. 

Arcane Research suggested that the Bitcoin sentiment among asset managers has flipped bullish, with short positions at $74.1 million, much lower than the peak seen in May of this year.

However, the research firm also suggested that Bitcoin price at $50,000 would be a difficult level to surpass given that the trading volume for the leading cryptocurrency is declining. 

Bitcoin investment products have also seen a week of outflows, while altcoins are now representing 32% of the total crypto assets under management, according to a CoinShares report. Ethereum killer protocols, in particular Cardano and Solana, have dominated the recovery, as sentiment has improved in altcoins rather than the bellwether cryptocurrency.

Cardano witnessed inflows of $10.1 million last week, the largest ever recorded, taking its market share to 0.15%. 

Solana saw inflows of $2.7 million last week, overtaking Bitcoin Cash in terms of AUM, while Polkadot witnessed $1.5 million of inflows. 

 

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