Global crypto investment products have surged, recording $1.2 billion in net inflows over the past week. This marks the third consecutive week of positive inflows and a notable shift in market sentiment, as highlighted by the latest report from CoinShares, a leading digital asset investment firm.
Coinshares revealed that the upward trend in inflows reflects “investor confidence” in digital assets amidst expectations of “dovish monetary policy” in the US. In addition, it is also seen as a reaction to improving “price momentum.”
According to CoinShares’ Head of Research, James Butterfill, this week’s positive performance is the largest in the last ten weeks, with total assets under management rising by 6.2%. The inflow largely stemmed from increased interest in Bitcoin-focused investment products.
Additionally, after weeks of declining performance, Ethereum-based investment funds recorded a resurgence, attracting net weekly inflows and marking a turnaround in investor sentiment toward the asset.
Bitcoin Dominates Inflows as Spot ETF Approval Boosts Market
The primary driver behind last week’s inflows was Bitcoin, which accounted for $1.1 billion of global net inflows.
According to Butterfill, the approval for the listing and trading options for BlackRock’s spot Bitcoin exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC) contributed significantly to market optimism.
The Head of Research at CoinShares disclosed that this regulatory development set a positive tone for investors, even though trading volumes saw a minor decline, decreasing by 3.1% compared to the previous week.
Meanwhile. investment funds based in the US were the major contributors to the inflows, with spot Bitcoin ETFs making up the majority. The US-based funds generated a net inflow of $1.2 billion, a substantial portion of which — $1.1 billion — came from Bitcoin-focused products.
Additionally, Switzerland-based crypto funds drew in net inflows of $84 million. However, this positive trend was not uniform across all regions, as funds in Germany and Brazil experienced net outflows of $21 million and $3 million, respectively.
The week also saw a contrasting movement in short Bitcoin investment products, which recorded net inflows of $8.8 million amid the price increase for Bitcoin.
Ethereum Sees Rebound, Solana Ends Positive Streak
One of the noteworthy developments was the reversal of a five-week negative trend in Ethereum-based investment products. These funds attracted net inflows of $87 million globally, with US-based spot Ethereum ETFs contributing $85 million.
This marks the largest net weekly inflow for Ethereum funds since August and suggests renewed confidence in the asset’s medium-term prospects.
In contrast, Solana-based investment products ended their five-week streak of net inflows. During the last week, $4.8 million was withdrawn from Solana funds globally.
While Solana has seen a period of growth and positive sentiment, the reversal indicates that investors may be looking to shift their focus to more established assets like Bitcoin and Ethereum in the short term.
Featured image created with DALL-E, Chart from TradngView
Related Posts
