Key takeaways
Did crypto funds see inflows despite the market crash?
Crypto funds attracted $3.17 billion in inflows, even as nearly $20 billion in liquidations rocked the market.
Are altcoin and Ether funds showing weakness?
Yes, both Ether and altcoin funds saw big outflows midweek.
Crypto investment products shrugged off last week’s brutal market crash, drawing billions in new capital despite widespread panic selling. Investors poured $3.17 billion into crypto funds – A sign of confidence even during bouts of sharp volatility and nearly $20 billion in liquidations.
Crypto funds defy the odds
A recent CoinShares report revealed that while total assets under management (AUM) dipped to $242 billion during Friday’s flash crash, inflows remained strong across major crypto funds.
Source: CoinShares
“Friday saw little reaction with a paltry $159 million outflows,” CoinShares’ Head of Research James Butterfill noted, proving the sector’s resilience despite billions being liquidated.
Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, also claimed that while inflows are encouraging, the crash was a wake-up call for overconfident traders. He told AMBCrypto,
“The bloodbath we saw in markets over the weekend is a brutal reminder that, as the crypto market grows and matures, the risks are amplified.”
He went on to add,
“The arrival of spot crypto ETFs and institutional interest has lulled investors into a false sense of security, but it remains the only market that trades after hours.”
Bitcoin [BTC] led inflows with figures of $2.7 billion over the week, bringing YTD inflows to $30.2 billion – Still about 30% below last year’s total of $41.7 billion. The surge in participation also pushed weekly trading volumes to a record $53 billion, including $15.3 billion on Friday alone.
Ether funds see pullback, despite weekly gains
Ether [ETH] investment products recorded $338 million in net inflows over the week.
However, they also faced the largest single-day outflow of $174.83 million on 10 October.
Source: SoSoValue
The sell-off dragged cumulative net inflows to $14.91 billion and came during the volatility of Friday’s flash crash. According to Butterfill, investors likely saw Ether funds as the “most vulnerable” during the downturn.
Puckrin noted,
“Ironically, now that the dust has settled, many blue-chip tokens have seen a strong rebound — including Ethereum, which is looking particularly strong back above $4,000. As such, many spot investors find themselves in a similar position to where they were before the flash crash.”
Despite the pullback, trading activity remained elevated though, with $4.77 billion in daily volumes. This hinted at sustained market engagement, even as sentiment briefly turned risk-off.
Altcoins slow down
Altcoin-focused funds lost momentum last week, despite ongoing enthusiasm for upcoming U.S ETF launches. Solana [SOL] products drew $93.3 million, while XRP funds added $61.6 million – Both seeing steep declines from the previous week’s surges of $706.5 million and $219 million.
The slowdown could be attributed to investor caution in the face of the liquidation event. Puckrin said,
“The biggest shock over the weekend was that traders were forced out of even profitable positions due to auto-deleveraging (ADL) on exchanges – a risk management mechanism that most will have not even heard about. It’s a blunt instrument that certainly deserves some scrutiny as exchanges conduct reviews of this mass liquidation event.”
That’s not all though. Especially since the ongoing U.S government shutdown has left at least 16 crypto ETF applications awaiting approval.
Source: X
According to ETF analyst Nate Geraci, once the shutdown ends, the market could witness a “flood” of new spot crypto ETFs – Potentially a catalyst for inflows.
