Investor confidence in crypto-related investment products saw a significant surge last week, boosted by the weaker-than-expected US macroeconomic data. According to CoinShares’ latest weekly report, these financial instruments attracted net inflows of $2 billion, matching the total inflows recorded for the entire month of May. This marks the fifth consecutive week of positive inflows, with a total of $4.3 billion worth of investments pouring in during this period. Notably, this is the second-longest streak of inflows since the SEC approved spot Bitcoin exchange-traded funds (ETF) in January.
James Butterfill, head of research at CoinShares, highlighted that the inflows were widespread across various providers such as BlackRock, Fidelity, Proshares, Bitwise, and Purpose. He also noted a significant decrease in outflows from Grayscale. Butterfill attributed the increase in inflows to the anticipation of monetary policy rate cuts due to the disappointing US macro data. He noted, “[The] positive price action saw total assets under management (AuM) rise above the $100 billion mark for the first time since March this year.”
Trading activity for crypto investment products saw a notable surge last week after weeks of subdued activities. The trading volume escalated by 55% to $12.8 billion, significantly exceeding the figure of $8 billion reported in the prior week. Bitcoin remains a key interest for investors, attracting $1.9 billion in inflows. On the other hand, short Bitcoin products experienced outflows for the third consecutive week, amounting to $5.3 million. Ethereum also saw a significant resurgence, with inflows of $69 million, marking its best week since March and pushing its year-to-date flows to $81 million.
In addition to Bitcoin and Ethereum, other significant altcoins saw relatively minor activities, with inflows below $1 million. However, Fantom and XRP stood out, attracting inflows of $1.4 million and $1.2 million, respectively. The positive market sentiment towards crypto-related investment products is further evidenced by the elevated trading volumes and increased investor interest across multiple providers. The recent influx of investments in these instruments reflects a growing optimism among investors, driven by the anticipation of favorable regulatory developments and a more accommodative monetary policy environment in the US.
Overall, the continuous influx of investments into crypto-related investment products underlines the increasing confidence among investors in the digital asset space. The positive price action and rising total assets under management signal a renewed bullish sentiment towards cryptocurrencies, particularly Bitcoin and Ethereum. With ongoing regulatory developments and macroeconomic factors influencing investor decisions, the recent surge in inflows highlights the growing importance of digital assets in the broader financial landscape. As investor interest continues to grow and market dynamics evolve, the crypto ecosystem is poised for further expansion and mainstream adoption in the coming months.
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