Crypto Funds Bounce Back with $862,000,000 Inflows

Crypto funds have experienced a significant rebound in sentiment, with inflows reaching $862 million last week. The inflow has nearly erased the previous week’s record outflows of $931 million, according to a recent report by CoinShares.

The report notes that ETF activity is slowing down, with daily trading turnover now at $5.4 billion, a 36% decrease from its peak three weeks ago.

Key points:

• Digital asset investment products saw inflows of $862 million last week.
• The US led the recovery with $897 million inflows, while Europe and Canada combined saw $49 million inflows.
• Bitcoin saw inflows of $865 million, with renewed appetite from new ETF issuers in the US.
• Ethereum experienced a fourth week of outflows, totaling $19 million.
• Altcoins, led by Solana, saw inflows of $18.3 million.

The report highlights a regional divergence in investor sentiment, with the United States driving the recovery with a further $897 million in inflows. In contrast, Europe and Canada combined saw outflows of $49 million, bringing their year-to-date outflows to $785 million.

Bitcoin was the primary beneficiary of crypto funds inflow

Bitcoin was the primary beneficiary of the renewed investor interest, with inflows totaling $865 million last week. The report attributes this to increased interest from US new ETF issuers, which saw $1.8 billion in inflows, partially offsetting Grayscale’s $967 million outflows.

Ethereum saw a fourth consecutive week of outflows, amounting to $19 million. The report suggests that this is a common occurrence following network upgrades, reflecting investor apprehension regarding the success of such upgrades.

Altcoins also saw inflows totaling $18.3 million last week. Solana led the way with $6.1 million in inflows, followed by notable flows from Filecoin ($3.9 million), Polkadot ($2.4 million), and Chainlink ($1.9 million).

While the recovery in inflows is encouraging for the digital asset investment product market, the report notes that ETF activity is slowing down. Daily trading turnover has decreased to $5.4 billion, a 36% reduction from its peak three weeks ago.

However, this figure remains well above the 2023 average of $347 million, indicating that the initial market hype surrounding these products is cooling off.