Declining Crypto Investment Income: Is Bitcoin Losing Momentum?

Crypto investment flows experienced a sharp contrast last week, falling to $270 million, marking a slowdown after consecutive weeks of strong activity.

Year-to-date inflows hit a record $37.3 billion, indicating continued growth in institutional interest in cryptocurrencies despite market volatility.

Crypto Inflows fall between profit margins

Bitcoin experienced massive outflows from $457 million last week, marking its first pullback since early September. It comes after a series of positive flows into digital asset investment products as BTC hits new highs. In particular, crypto revenues reached $3.12 billion last week.

The impact of macroeconomic trends also played a role. Two weeks ago, gains reached $2.2 billion as optimism over the US Republican primary and a dovish stance from the Federal Reserve boosted investor sentiment.

However, the momentum seems to be fading. Following the first post-election rally, the inflow rates were adjusted. Last week's figures reflect a significant decline from the $1.98 billion seen immediately after the election. CoinShares' James Butterfill described the selloff as profit-taking after Bitcoin approached the $100,000 psychological level.

“We believe Bitcoin is profitable following a test of the $100,000 psychological level,” Butterfill said.

Meanwhile, experts are divided in the opinion of Bitcoin. Pessimists, including prominent figures such as former Wall Street quant Ton Weiss, predict further declines.

Weiss has decided to exit all long positions at $97,800, indicating caution among experienced traders. The analyst expressed his doubt that this year Bitcoin will continue its achievement of $ 100,000.

Still, keeping a $100,000 break this year is unthinkable. Will be more than happy to make a mistake or buy a dip sub for $90,000! It might be a short consideration,” he said.

Conversely, a more optimistic outlook remains. Fundstrat's Tom Lee remains bullish, predicting that Bitcoin will reach $250,000 by the end of 2025. But Lee's team acknowledged short-term setbacks, with some expecting a dip to $60,000 before resuming the upward trend.

Robert Kiasaki, author of Rich Dad's Poor Dad, echoed this sentiment, but emphasized that any dip is a long-term accumulation opportunity.

“Bitcoin closes at $100,000. That means BTC may fall to $60,000. If and when that happens, I won't sell,” Kiyosaki said.

As Bitcoin faced outflows, Ethereum posted a record $634 million in inflows, showing renewed investor confidence in the asset. Ethereum's YTD revenues hit $2.2 billion, supported by a growing sentiment shift as traders head to altcoins amid Bitcoin's short-term uncertainty.

The trading volume of the crypto exchange-traded products (ETPs) market has decreased, from $34 billion a week ago to $22 billion last week.

Although options are entered on US ETFs (exchange-traded funds), their impact on overall market volumes is limited. This development raises concerns about the level of sustained institutional interest in these financial instruments.