In the context of the continuously growing cryptocurrency market, the inflow of funds into this space is also skyrocketing, as demonstrated in the latest weekly report on digital asset fund flows by CoinShares. The staggering numbers reveal that investor sentiment and activity are significantly on the rise.
In the previous week, a massive $346 million poured into digital asset investment products, marking the largest weekly inflow observed for nine consecutive weeks. It’s also the largest increase since the peak of the bull market at the end of 2021. This surge in investment is a clear reflection of investor optimism.
The primary driving force behind this rapid increase is largely associated with predictions surrounding the approval of a Bitcoin ETF Spot by the SEC. Speculation has driven both prices and fund inflows, resulting in a notable rise in total assets under management (AuM) to an impressive $45.3 billion, the highest since June 2022.
Delving into regional allocation, the majority of the inflow came from Canada and Germany, accounting for 87%. In contrast, the United States only saw a relatively modest inflow of $30 million. Many speculate that the limited participation of US investors is due to them waiting for the ETF launch before executing their investment strategies.
Analyzing the inflow of individual assets, Bitcoin continues to maintain its status as the “big brother” of the market, witnessing an astonishing inflow of $312 million, surpassing $1.9 billion year-to-date.
What’s interesting is the coinciding increase with Short Sellers surrendering for the third consecutive week, marking a significant reversal in trends. Despite a 61% decline in AuM since the peak in April 2023, Bitcoin exchange-traded product (ETP) volumes remain strong, accounting for 18% of the total Bitcoin spot trading volume, highlighting a sustainable preference for ETPs as an exposure vehicle for this asset class.
Similarly, Ethereum has also seen a resurgence in investor sentiment, with an inflow of up to $34 million. This recent positive trend, with a total value of $103 million over the past four weeks, is a complete reversal from the earlier outflows, signifying a significant shift in investor sentiment towards Ethereum.
Furthermore, other prominent digital assets such as Solana, Polkadot, and Chainlink have also seen notable inflows of $3.5 million, $0.8 million, and $0.6 million, respectively. This contributes to the overall momentum in the cryptocurrency investment landscape.