Extreme Fear Grips Investors Despite Institutional Bitcoin Adoption

Many investors have been extremely fearful about the uncertainty of the crypto market over the past few days. This sentiment is evident in the latest data from Alternative.me, showing the Crypto Fear & Greed Index, which sat at 17/100, a nod towards extreme fear.

This bearish market sentiment comes when prominent investment companies are embracing the top crypto assets in the market.

What is the Crypto Fear & Greed Index?

The Crypto Fear & Greed Index is an indicator that collates crypto investors’ dominant emotions and classifies them into three sections: 0-49 (Fear), 50 (Neutral), and 51-100 (Greed). Identifying the domineering sentiment enables users to execute the needed investment choice.

A move toward extreme fear shows that investors are scared of market conditions and are liquidating their crypto portfolios. For the past two days, the indicator has shown a fearful market sentiment at 34/100 and 26/100, respectively.

Investors’ concerns about the market condition are not far-fetched. The crypto market tanked to a market valuation of around $1.8 trillion. However, it has now rebounded above $2 trillion, a 4.8% increase in the past 24 hours.

Increasing Institutional Bitcoin Adoption

Yesterday’s reports confirmed that Capula Management, one of Europe’s largest hedge funds, injected nearly $500 million into Bitcoin, the leading cryptocurrency. The firm accumulated these bitcoins by investing in BlackRock’s IBIT and Fidelity’s FBTC, two spot Bitcoin exchange-traded funds (ETFs) with the most significant inflow frequency.

Last week, word got out that Wall Street’s giant bank, Morgan Stanley, will offer the spot Bitcoin exchange-traded fund (ETF) to wealthy investors with a minimum portfolio of $1.5 million starting August 7th. The report added that the company would allow these wealthy clients to purchase only IBIT or FBTC.

To capture the attention of more mainstream audiences, investment firm Grayscale launched a Mini Bitcoin Trust with a competitive “ultra-low” 0.15% fee. Since its debut, the investment vehicle has recorded inflows totaling $241 million worth of BTC at press time.

Despite these measures to bring the leading crypto to institutional audiences globally, the crypto market has yet to see an exponential bounce from its current bearish trends.