The cryptocurrency market saw a significant influx of investments last week as notable factors played a key role in changing investor sentiment.
According to the latest report from CoinShares, digital asset investment products saw net inflows of $407 million globally, marking a strong recovery after a previous week of outflows. This increase in inflows has been mainly attributed to an interesting trend in the United States.
Bitcoin Leads Inflows As Ethereum Sees Continued Outflows
Bitcoin investment products were the main leader in fund flows last week, attracting $419 million in net inflows, according to CoinShares data.
Interestingly, short Bitcoin investment products, designed to take advantage of falling Bitcoin prices, saw outflows of $6.3 million, reflecting growing bullish sentiment around the cryptocurrency .
Spot Bitcoin exchange-traded funds (ETFs) in the United States also accounted for $348.5 million in net inflows last week, despite brief outflows from Tuesday to Thursday.
The week ended strong with over $200 million in positive flows on Monday and Friday, signaling 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 found that Ethereum investment products saw net outflows of $9.8 million globally, despite a small inflow of $1.9 million into Ethereum spot ETFs in the United States. -United.
This marks a continuation of the negative trend that Ethereum has been struggling with in recent weeks, indicating continued concerns among investors regarding the asset’s near-term prospects.
Other multi-asset investment products, which include exposure to various cryptocurrencies, have maintained a positive trajectory. These products recorded their 17th consecutive week of entries, adding a modest $1.5 million to their total.
Additionally, blockchain stock ETFs saw a notable increase, generating $34 million in inflows, making it one of the largest weekly increases of the year. Butterfill attributed the rise to recent increases in the price of Bitcoin, further strengthening the connection between Bitcoin’s performance and the overall health of the crypto market.
What drove the $407 million increase in inflows?
James Butterfill, head of research at CoinShares, highlighted the impact of US political developments on the inflow trend.
“Investor decisions were likely more influenced by the upcoming US election than the outlook for monetary policy,” Butterfill explained, pointing to the Republican Party’s growing support for digital assets as a driving factor.
CoinShared’s head of research further pointed out that this shift was evident following the recent US vice presidential debate and polling data that showed increased Republican support, leading to an “immediate increase” in entries and prices of cryptocurrencies.
In terms of regional fund flows, unsurprisingly, US-based funds dominated inflows, contributing $406 million to the total inflows of $407 million recorded last week.
Aside from the United States, the only other significant contributor to positive inflows came from Canadian crypto funds, which saw net inflows of $4.8 million. In contrast, funds based in other regions saw minor outflows.
Featured image created with DALL-E, chart from TradfingView
