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The cryptocurrency market witnessed a significant event last week, with investment products recording approximately $3.13 billion in net inflows globally, primarily driven by US exchange-traded funds (ETFs), according to Data From Queen Shares.
This increase highlights the growing institutional interest and confidence in the cryptocurrency market, with Bitcoin leading the charge. CoinShares reveals that year-to-date net inflows into cryptocurrency funds have reached $37 billion, while total assets under management (AUM) have risen to a new high of $153 billion.
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Bitcoin is taking the lead, and altcoins are showing growth
The latest inflows mark the seventh straight week of positive moves for global cryptocurrency investment products managed by leading firms such as BlackRock, Fidelity, Grayscale and ProShares.
A large portion of last week’s inflows, about $2.05 billion, came from BlackRock’s IBIT product, underscoring the dominance of US-based funds in the global space. These inflows outpaced the first-year debut of US gold ETFs, which attracted just $309 million.
Bitcoin-based funds were at the forefront of inflows, contributing $3 billion to the weekly total. This influx coincided with Bitcoin prices continuing to rise, attracting additional interest from institutional and retail investors.
However, the price surge also led to a notable $10 million inflow into short Bitcoin products, bringing the monthly figure for these products to $58 million – the highest level since August 2022.
While Bitcoin has dominated, altcoins have also attracted significant investments. Solana emerged as the second most popular asset among institutional investors, with weekly net inflows reaching $16 million, surpassing Ethereum’s $2.8 million.
Other altcoin-based funds also saw notable inflows, with XRP, Litecoin, and Chainlink attracting $15 million, $4.1 million, and $1.3 million, respectively. These flows indicate growing confidence in the broader altcoin market, driven by rising prices and increasing adoption.
Global cryptocurrency flows and regional trends
The dominance of US-based funds was evident in regional fund flows, accounting for $3.2 billion of weekly net flows.
However, this was slightly “offset” by outflows from European markets, including $84 million, $40 million and $17 million from cryptocurrency investment products in Sweden, Germany and Switzerland, respectively.
Despite these regional outflows, the overall trend remains bullish, largely driven by institutional participation in the US market.
Notably, the continued inflows of CoinShares reflect a combination of factors, including positive market sentiment regarding the rally and growing acceptance of cryptocurrencies as a legitimate asset class.
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The launch of spot Bitcoin ETFs has been a pivotal development. It provides institutional investors with a regulated way to gain exposure to digital assets.
As a result, the cryptocurrency market is witnessing a shift towards mainstream adoption, also supported by strong price performance and continued flows across various investment products.
Featured image created with DALL-E, chart from TradingView
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