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Latest weekly digital asset fund flows a report CoinShares revealed that last week, crypto asset investment products saw nearly $2.2 billion in net inflows globally, representing the largest inflow since July.
This rise in flows comes amid the gradual recovery of top crypto assets last week, with the majority now reclaiming key highs and recording nearly double-digit gains over the past seven days.
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Who led this charge?
Bitcoin-based products were the most prominent beneficiaries of inflows last week. U.S. Bitcoin exchange-traded funds (ETFs) have added $2.1 billion, with BlackRock’s IBIT ETF alone generating more than $1.1 billion.
Cumulative inflows of Bitcoin ETFs, which began trading in January, now stand at $21 billion. These funds have grown to a record $66 billion in assets under management, highlighting their important role in the market.
Notably, the renewed confidence in Bitcoin products mirrors the positive sentiment earlier this year. Last week’s inflows were the largest since March, when U.S. Bitcoin ETFs saw $2.6 billion as Bitcoin reached an all-time high above the $73,000 price mark.
This strong demand indicates that investors remain optimistic about Bitcoin’s long-term prospects, despite recent market volatility. While Bitcoin stole the spotlight, other cryptocurrencies also saw inflows last week although much less than Bitcoin’s.
Ethereum-based products attracted $58 million in net inflows, while Solana, Litecoin, and Ripple-based funds saw smaller inflows of $2.4 million, $1.7 million, and $700,000, respectively.
However, multi-asset investment products did not fare as well, seeing net outflows of $5.3 million, ending a 17-week streak of consecutive inflows.
What drove the spike in cryptocurrency inflows?
According to CoinShares, this rise in inflows is linked to growing optimism about the upcoming US elections, with a potential Republican win driving investor sentiment.
Many believe that a Republican administration will favor the digital asset market more favorably, leading to increased investor confidence and positive price momentum. James Butterville, head of research at CoinShares, noted in particular:
We believe this renewed optimism stems from growing expectations that Republicans will win the upcoming US elections, as they are generally seen as more supportive of digital assets.
It is worth noting that Butterfill reiterated these views, adding that trading volume for these investment products rose by 30% last week. The total assets under management (AUM) of cryptocurrency funds is now approaching $100 billion on a global scale, highlighting the significant interest in digital assets.
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However, while US-based funds have boomed, investment products in other countries such as Canada, Sweden and Switzerland have seen net outflows, indicating a more polarized global market.
Featured image created with DALL-E, chart from TradingView