The crypto market witnessed a remarkable surge last week, as revealed by the latest digital asset fund flow report from CoinShares. The report highlighted global net inflows of about $2.2 billion into crypto asset investment products, marking the most significant inflow since July. This positive trend aligns with the gradual recovery of leading crypto assets, many of which have regained major highs, registering substantial gains over the past week.
Who Led the Charge?
Bitcoin-based products emerged as the primary beneficiaries of this inflow surge. U.S. spot Bitcoin exchange-traded funds (ETFs) added a staggering $2.1 billion, with BlackRock’s IBIT ETF alone contributing over $1.1 billion to this figure. Since beginning operations in January, these Bitcoin ETFs have collectively drawn in $21 billion, growing to manage an impressive $66 billion in assets under management, underscoring their pivotal role in the crypto market.
Interestingly, this renewed enthusiasm for Bitcoin products mirrors the positive sentiment witnessed earlier this year. Last week’s substantial inflows were the largest since March, a period when U.S. spot Bitcoin ETFs saw $2.6 billion as Bitcoin reached its all-time high above the $73,000 price mark. This robust demand indicates that investors maintain a bullish outlook on Bitcoin’s long-term potential, despite recent market fluctuations.
While Bitcoin dominated the scene, other cryptocurrencies also attracted investor attention. Ethereum-based products recorded $58 million in net inflows. Meanwhile, Solana, Litecoin, and XRP funds experienced smaller inflows of $2.4 million, $1.7 million, and $700,000, respectively. However, multi-asset investment products faced a setback, suffering net outflows of $5.3 million, thereby ending a 17-week streak of consistent inflows.
What Prompted The Surge In Crypto Inflow?
CoinShares attributes this surge in inflows to growing optimism surrounding the upcoming U.S. elections, with a potential Republican victory fueling investor sentiment. There is a prevailing belief that a Republican administration may adopt a more favorable stance towards the digital asset market, thereby boosting investor confidence and fostering positive price momentum.
James Butterfill, Head of Research at CoinShares, emphasized:
We believe this renewed optimism stems from growing expectations of a Republican victory in the upcoming U.S. elections, as they are generally viewed as more supportive of digital assets.
Butterfill further highlighted that trading volume for these investment products surged by 30% last week. The total assets under management (AUM) for crypto funds are now approaching the $100 billion mark globally, underscoring the substantial interest in digital assets.
Despite the thriving performance of U.S.-based funds, investment products in other countries like Canada, Sweden, and Switzerland experienced net outflows, suggesting a more polarized global market.
