Cryptocurrency investment products recorded strong capital inflows last week. According to CoinShares' latest weekly report, a total net inflow of $619 million was recorded into digital asset-based investment funds. This marks the second week of recovery in investor demand.
This data shows that investor appetite is regaining strength after a five-week outflow that pressured the market earlier in the year. The previous week, approximately $1 billion in inflows were recorded into crypto investment products.
According to the report, very strong demand was seen in the first days of the week. Between Monday and Wednesday, $1.44 billion in capital flowed into digital asset investment products. However, the market outlook changed towards the end of the week. On Thursday and Friday, a total outflow of $829 million occurred, and the total weekly inflow decreased significantly. CoinShares Head of Research James Butterfill stated that macroeconomic developments were influential in the weakening during the second half of the week. Geopolitical tensions, particularly in the Middle East, and rising oil prices have brought inflation expectations back to the forefront of global markets. This has limited investors' appetite for risky assets. Despite this, the overall picture indicates continued interest in the crypto asset class. Butterfill stated that weak US employment data could normally reduce inflationary pressure, but the rise in oil prices offset this effect. Nevertheless, fund flows show that demand for crypto assets continues even amidst geopolitical stress.
Examining regional data, it is seen that the majority of weekly inflows originated from the US. US-based crypto investment products recorded a total inflow of $646 million. This figure constitutes almost the entire weekly total.
In contrast, investors in Europe, Asia, and Canada adopted a more cautious stance. Outflows of approximately $23.8 million were recorded in Europe, $2.2 million in Asia, and $3.6 million in Canada. This indicates that uncertainties in global markets are pushing investors, especially those outside the US, to act more cautiously.
Bitcoin Funds Draw $521 Million
Bitcoin is by far the focus of investors when viewed on an asset basis. Bitcoin-based investment products attracted $521 million in inflows throughout the week, making up the majority of total flows. However, it is noteworthy that the market is not entirely one-sided. Some investors also turned to short-Bitcoin products to hedge against potential price fluctuations. These products recorded inflows of $11.4 million during the week.
On the altcoin side, there were more limited but noteworthy movements. Ethereum funds received $88.5 million in inflows, while Solana-based investment products attracted $14.6 million in capital. Although on a smaller scale, Uniswap and Chainlink funds also saw inflows of approximately $1.4 million. On the other hand, the only category among major assets that showed negative performance was XRP. XRP-based investment products closed the week with outflows of $30.3 million.
