The cryptocurrency market witnessed a huge influx of investments last week, with prominent factors playing a major role in changing investor sentiment.
According to another a report From CoinShares, digital asset investment products saw net inflows of $407 million globally, marking a sharp rebound after the previous week of outflows. This rise in flows is primarily due to the interesting trend in the United States.
Bitcoin advances in fund inflows as Ethereum sees continued outflows
Bitcoin investment products were the main leader in money flow last week, attracting net inflows of $419 million, according to data from CoinShares.
Interestingly, short-term Bitcoin investment products, designed to take advantage of falling Bitcoin prices, saw outflows of $6.3 million, reflecting growing bullish sentiment around the cryptocurrency.
US Bitcoin exchange-traded funds (ETFs) also accounted for $348.5 million in net inflows last week even though they saw brief outflows from Tuesday to Thursday.
It finished the week strong with positive inflows of over $200 million on Monday and Friday, indicating renewed investor confidence in the digital asset market.
While Bitcoin-related products enjoyed significant inflows, Ethereum-based funds continued to face challenges. The CoinShares report revealed that Ethereum investment products saw net outflows of $9.8 million globally, despite a small inflow of $1.9 million into spot ETFs in the US.
This represents a continuation of the negative trend that Ethereum has suffered in recent weeks, indicating continued concerns among investors about the asset’s near-term outlook.
Other multi-asset investment products, which include exposure to various cryptocurrencies, maintained a positive trajectory. These products recorded streams for the 17th consecutive week, adding a modest $1.5 million to their total.
Additionally, blockchain equity ETFs saw a notable rise, bringing in $34 million in inflows, making it one of the largest weekly increases of the year. Butterville attributed this rise to the recent gains in the price of Bitcoin, which has solidified the relationship between Bitcoin’s performance and the overall health of the cryptocurrency market.
What led to the increase in inflows of $407 million?
James Butterville, Head of Research at CoinShares, highlighted the impact of US political developments on the flow direction.
“Investor decisions are likely to be influenced more by the upcoming US elections than by monetary policy expectations,” Butterville explained, citing growing support for digital assets from the Republican Party as a driving factor.
The head of CoinShared Research also noted that this shift was evident in the wake of the recent US Vice Presidential debate and poll data showing increasing Republican support, leading to an “immediate increase” in inflows and cryptocurrency prices.
Regarding regional fund flows, it is not surprising that US-based funds dominated inflows, contributing $406 million of the total inflows of $407 million recorded last week.
Aside from the US, the only other significant contributor to positive inflows came from Canadian cryptocurrency funds, which saw net inflows of $4.8 million. In contrast, funds based in other regions recorded slight outflows.
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