Digital Assets Investments Still Lagging Behind ETPs Despite Record Inflows
Last week, digital asset investment products received a significant influx of capital, totaling $1.18 billion. However, this falls just short of the record set during the launch of futures-based Bitcoin ETFs in October 2021, which amassed $1.5 billion. Trading volumes for exchange-traded products (ETPs) also reached a historic high, reaching $17.5 billion for the week. These trading volumes represented almost 90% of daily trading volumes on trusted exchanges last Friday.
Regional Inflows and Outflows
The United States attracted $1.24 billion in inflows, while Switzerland saw notable inflows of $21 million. On the other hand, Europe and Canada experienced outflows, with Canada witnessing $44 million, Germany $27 million, and Sweden $16 million in capital moving out. This phenomenon is likely due to basis traders transitioning their investments from Europe to the United States.
Bitcoin Dominance and Other Inflows
Bitcoin remains a dominant force, drawing in $1.16 billion in inflows last week. Short-bitcoin products saw modest inflows of $4.1 million. Ethereum attracted $26 million in inflows, while XRP garnered $2.2 million. Solana received only $0.5 million in inflows during the same period. Additionally, blockchain equities witnessed substantial inflows totaling $98 million over the past seven weeks.
Bitcoin Posts Worst Monthly Performance
Bitcoin recently experienced its worst streak in about a month following the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission. The cryptocurrency remained highly volatile, ultimately trading little changed at $42,655. The introduction of nearly a dozen US exchange-traded funds focused on cryptocurrencies led to this recent bout of turbulence. Market analysts suggest a possible slide to the $38,000 to $40,000 range for Bitcoin.
Conclusion
Last week saw significant inflows into digital asset investment products, with Bitcoin leading the way. Despite falling short of the record set by Bitcoin ETFs in October 2021, the inflows highlight growing investor interest in the blockchain and cryptocurrency sectors. However, Bitcoin’s recent performance has been lackluster, with increased volatility following the introduction of spot Bitcoin ETFs. While supporters see this as a milestone for the cryptocurrency, skeptics remain cautious due to concerns about wider adoption and previous market crashes.
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