According to the latest data from CoinShares, there were notable capital inflows into digital asset investment products last week, amounting to $346 million.
This figure marks the ninth consecutive week of the most significant weekly inflows and marks a pivotal point last seen during the bull market’s frenzy at the end of 2021. According to reported figures, the surge in inflows led to an increase in total assets under management (AuM). This amounted to $45.3 billion, the highest in over 18 months.
Canada and Germany accounted for 87% of the total, with inflows of $199.1 million and $101.5 million, respectively. In contrast, in the United States, investors were eager to launch spot-based exchange-traded funds (ETFs), which recorded a relatively modest $30 million.
However, the United States still has significantly more assets under management, at $33.1 billion, more than 10 times more than the next country.
Bitcoin and Ethereum are leading the way.
Bitcoin attracted $311.5 million in inflows last week, taking inflows past $1.5 billion so far this year. This strong accumulation comes at a time when short selling appears to be pulling back, as evidenced by three consecutive weeks of outflows of $900,000 from short-term Bitcoin ETPs.
Ethereum received $33.5 million in inflows, contributing to a total of $103 million over four weeks. The trend nearly nullifies previous outflows this year and signals a decisive shift in investor sentiment for the second-largest digital asset by market capitalization.
Implications for the cryptocurrency market
The injection of capital into other cryptocurrencies such as Solana, Polkadot, and Chainlink indicates that there is diverse investment interest within the sector, albeit relatively small. The continued use of exchange-traded products (ETPs) further highlights the growing preference for regulated financial products to gain cryptocurrency exposure, with ETPs accounting for 18% of total Bitcoin spot trading volume last week.
These financial moves are consistent with rising expectations for US-based spot ETFs. The rise in AuM and continued inflows into native and alternative digital assets suggest an increasingly optimistic market, or at least betting on the potential of a more regulated and accessible cryptocurrency investment environment.
Butterfill said there has been a “decisive shift in sentiment,” and the data appears to represent a snapshot of an industry at an inflection point, with investor sentiment and market dynamics aligning in a way that could define the trajectory of the cryptocurrency market. For the near future.
Check out the full CoinShares weekly report on James Butterfill’s Medium blog.