Record $1bn Inflows in Digital Asset Investment

On May 28, 2024

Record $1bn Inflows in Digital Asset Investment

In a landmark development for the digital asset market, inflows have surged by US$1bn, pushing the year-to-date inflows to a staggering record high of US$14.9bn. This remarkable achievement underscores the increasing investor confidence and interest in digital assets, particularly in Bitcoin and Ethereum.

Bitcoin Leads the Charge

According to CoinShares, the majority of these inflows were into Bitcoin ETPs, which saw an impressive US$1.01bn last week alone. This significant influx has been a key driver for the overall record-breaking totals seen this year.

Interestingly, while Bitcoin ETPs experienced massive inflows, short-Bitcoin products suffered outflows totalling US$4.3m, suggesting a shift in market sentiment towards a more optimistic outlook for Bitcoin despite recent price increases. This shift is likely influenced by the interpretation of the Federal Open Market Committee (FOMC) minutes and recent macroeconomic data, which investors perceive as slightly dovish.

Ethereum and Other Digital Assets

Ethereum also saw a substantial increase in inflows, amounting to US$36m for the week. This marks the highest weekly inflow for Ethereum since March, likely driven by the approval of ETH ETFs in the United States. Other digital assets like Solana also benefitted, with inflows of US$8m last week.

Regional Insights

The inflows were predominantly concentrated in the United States, which accounted for US$1.03bn of the total. Grayscale, a significant player in the market, saw its outflows reduce dramatically to just US$15m for the week. Europe also showed positive trends, with Germany and Switzerland seeing inflows of US$48m and US$30m respectively.

However, not all regions witnessed positive movements. In Hong Kong, despite an initial surge following the launch of Bitcoin spot-based ETFs (which saw US$300m in the first week), there were outflows of US$29m last week.

Market Overview

The recent price increases have propelled the total value of digital asset ETPs to US$98.5bn, with weekly ETP trading volumes rising by 28% to US$13.6bn. The consistent inflows over the past three weeks highlight growing investor interest and confidence in the digital asset market.

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