Institutional Investors Buy the Dip in Crypto Amid ‘Extreme Price Weakness’

Institutional investors are buying the dip amid ‘extreme price weakness” in the crypto space after the catastrophic collapse of the popular cryptocurrency exchange FTX and its sister company Alameda Research.

Cryptocurrency investment products witnessed the largest inflows in 14 weeks last week, rounding up to about $42 million. The inflows started later in the week and were followed by the collapse in crypto prices over FTXs’s liquidity crisis.

It indicates that investors view this price weakness as an opportunity, drawing the line between “trusted third parties and an inherently trustless system. The firm’s data shows that weekly flows to products focused on Bitcoin hit $18.8 million, and the flows to products offering investors exposure to Ethereum touched $2.5 million.

Products betting against the flagship crypto, Bitcoin, also saw inflows of $12.6 million, hinting that some institutional investors are betting against BTC. Multi-asset investment products, or the ones offering exposure to multiple cryptocurrencies, saw $8.4 million in inflows.

A popular crypto analyst suggests that the BTC price could soon hit the bottom of the current bear market post the FTX collapse. Rekt Capital, a pseudonymous analyst, observed that previous Bitcoin bear cycles saw a cryptocurrency trading platform collapse before bottoming out. The analyst followed it up by noting that historically Bitcoin’s price trends to bottom 517-547 days before the next halving event, which is less than 540 days away.

Strategists at Wall Street giant JPMorgan also suggest that BTC could collapse to $13,000 amid cascading margin calls brought about by the liquidity crisis at FTX.