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The latest weekly flow of digital asset funds report of CoinShares has revealed that crypto asset investment products saw approximately $2.2 billion in net inflows globally last week, marking the largest inflows since July.
This surge in inflows comes amid the gradual recovery of major crypto assets last week, with the majority now regaining major highs and posting near double-digit gains over the past seven days.
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Who led the charge?
Bitcoin-based products were the standout beneficiaries of last week’s inflows. US Bitcoin exchange-traded funds (ETFs) added $2.1 billion, with BlackRock’s IBIT ETF alone generating more than $1.1 billion.
Cumulative inflows for these Bitcoin ETFs, which started trading in January, now stand at $21 billion. These funds have grown to a record $66 billion in assets under management, underscoring their important role in the market.
In particular, the renewed confidence in Bitcoin products reflects the positive sentiment from earlier this year. Last week’s inflows were the largest since March, when US spot Bitcoin ETFs reached $2.6 billion as Bitcoin hit its all-time high above $73,000.
This strong demand suggests that investors remain optimistic about Bitcoin’s long-term prospects despite recent market fluctuations. While Bitcoin stole the spotlight, other cryptocurrencies also experienced inflows last week, although much less than that of BTC.
Ethereum-based products attracted net inflows of $58 million, while Solana, Litecoin and XRP-based funds saw smaller inflows of $2.4 million, $1.7 million and $700,000 respectively.
However, multi-asset investment products underperformed, with net outflows of $5.3 million, ending a seventeen-week streak of consecutive inflows.
What caused the rise in crypto inflows?
According to CoinShares, this increase in inflows is linked to growing optimism about the upcoming US elections, with a potential Republican victory boosting investor sentiment.
Many believe that a Republican administration would favor the digital asset market more favorably, leading to an increase in investor confidence and positive price momentum. James Butterfill, head of research at CoinShares, specifically noted:
We believe this renewed optimism stems from growing expectations of a Republican victory in the upcoming US elections, which are generally seen as more supportive of digital assets.
Notably, Butterfill echoed these views, adding that trading volume for these investment products rose 30% last week. Total assets under management (AUM) for crypto funds are now approaching $100 billion globally, underscoring the substantial interest in digital assets.
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However, while US funds flourished, investment products in other countries such as Canada, Sweden and Switzerland saw net outflows, indicating a more polarized global market.
Featured image created with DALL-E, Chart from TradingView