The First Week of 2024 Sees Surge in Crypto Asset Investments
In the first week of 2024, crypto asset investments experienced a significant milestone with inflows totaling $151 million, according to a recent report from CoinShares. This surge in inflow is particularly noteworthy considering the ongoing Grayscale vs. US Securities and Exchange Commission (SEC) lawsuit, contributing to a total of $2.3 billion since October 2022.
American Exchanges Lead Inflows, Bitcoin Dominates
Despite the absence of a spot exchange-traded fund (ETF) launch in the US, American exchanges accounted for over half of the inflows at 55%. German and Swiss exchanges followed with contributions of 21% and 17% respectively. Among the cryptocurrencies, Bitcoin emerged as the leader with $113 million in investment inflows, representing 3.2% of total assets under management (AuM) in the past nine weeks.
Contradicting “Buy the Rumor, Sell the News”
James Butterfill, Head of Research at CoinShares, noted an interesting trend challenging the expectation of a “buy the rumor, sell the news” event with regards to a spot Bitcoin ETF launch in the US. Despite this anticipation, there have been outflows totaling $7 million from short-Bitcoin exchange-traded products (ETPs) over the last nine weeks. This suggests that investors may not anticipate a significant price drop following the ETF launch.
Ethereum’s Noteworthy Performance and Mixed Sentiments for Altcoins
Ethereum saw inflows of $29 million in crypto asset investments, indicating a shift in investor sentiment towards the second-largest cryptocurrency. While Solana faced outflows amounting to $5.3 million, Cardano, Avalanche, and Litecoin witnessed inflows. Cardano received $3.7 million, Avalanche $2 million, and Litecoin $1.4 million in investment inflows. The blockchain equity sector also started the year strong with inflows of $24 million in the past week.
Bitcoin Rebounds as Ethereum Shows Signs of Recovery
Bitcoin recently experienced a net outflow of $32.8 million but saw a rebound with a $113 million inflow. The cryptocurrency has increased by 5.2% over the past week and continues its upward trajectory, nearing the $45,000 mark. Ethereum, after a 2% decline over the past week, is also showing signs of recovery with a nearly 1% increase in the past day. Other altcoins like Solana, Cardano, Avalanche, and Litecoin have seen losses but to a lesser extent.
Hot Take: Crypto Asset Investments Reach New Heights in 2024
The first week of 2024 has set an impressive milestone for crypto asset investments with a surge in inflows amounting to $151 million. This growth comes amidst ongoing legal battles and challenges the expectation of a “buy the rumor, sell the news” event surrounding a potential spot Bitcoin ETF launch in the US. Bitcoin remains dominant in investment inflows while Ethereum shows signs of recovery. Altcoins present mixed sentiments among investors. As we continue into the new year, it will be interesting to see how these trends evolve and shape the future of crypto asset investments.
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