Digital Asset Investment Products Experience Third Consecutive Week of Net Inflows
Asset managers including CoinShares, Bitwise, Grayscale, ProShares, and 21Shares have seen net inflows in their digital asset investment products for the third week in a row. The total net inflow amounted to $15 million, with Bitcoin dominating the inflows.
Last week alone, Bitcoin products received $16 million in inflows, bringing the year-to-date total to $260 million. Additionally, short-Bitcoin funds saw inflows of $1.7 million.
It’s important to note that this data is as of Friday’s close and does not account for the recent positive news from the U.S. regarding the SEC not appealing the Grayscale legal challenge. This development could potentially pave the way for a spot-based ETF in the country, according to James Butterfill, Head of Research at CoinShares.
Inflows Seen in Solana and XRP Products
Solana investment products experienced an additional $3.7 million in inflows, adding to the $24 million recorded in the previous week. XRP funds also saw modest inflows of $0.42 million, marking the 25th consecutive week of positive inflows for this product. Butterfill highlighted that these consistent inflows demonstrate strong support from the investment community, especially considering successful legal challenges against the SEC.
Overall, these net inflows indicate a steadily improving sentiment in the market.
Ether Funds Experience Outflows
However, it wasn’t all positive news as Ether funds witnessed outflows of $7.4 million. This essentially reversed most of the $10 million in inflows that were added after the launch of six Ether futures ETFs in the previous week. Butterfill suggested that these outflows may be attributed to ongoing concerns about protocol design.
In addition, Chainlink, Litecoin, and Tezos products also experienced outflows of $0.31 million, $0.28 million, and $0.25 million respectively.
Regional Divide Persists, Trading Volume Remains Low
The U.S. market saw minimal inflows into crypto funds, adding only $2.1 million last week. On the other hand, Germany recorded the highest inflows of $16.1 million, followed by Canada with $3.5 million. Sweden was the only European country to report outflows, totaling $7.5 million.
Despite the consecutive net inflows, trading volume remains 27% below the average for 2023, as noted by Butterfill.
Hot Take: Positive Momentum Continues in Crypto Investments
The recent net inflows in digital asset investment products indicate a growing positive sentiment in the market. Bitcoin continues to dominate the inflows, while Solana and XRP products also receive significant support from investors.
However, concerns about Ether’s protocol design have led to outflows in Ether funds, and other cryptocurrencies like Chainlink, Litecoin, and Tezos have also experienced some outflows.
Regionally, Germany has shown strong interest in crypto investments with significant inflows reported. The U.S., on the other hand, has seen minimal inflows.
Despite the overall positive trend in net inflows, trading volume remains relatively low compared to previous years.
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