Digital Asset Inflows Surge for the Third Week, Totalling $1.2 Billion

For the third consecutive week, digital asset products experienced strong inflows, totalling $1.2 billion. This rise is largely driven by expectations of a more accommodative monetary policy in the US, according to a report from CoinShares.

Factors Driving Digital Asset Inflows

Investor sentiment has been influenced by the anticipation of dovish monetary policy from the U.S. Federal Reserve, along with positive price momentum in digital assets. These factors have encouraged increased investment, despite some market uncertainty.

James Butterfill, a research analyst at CoinShares, noted that the approval of options for certain U.S.-based digital investment products further boosted inflows. This development likely contributed to the surge in interest as investors gained access to more diverse products.

Overall, assets under management (AuM) in digital asset products jumped by 6.2% last week. This increase reflects renewed confidence and optimism among investors, who are betting on long-term growth in the digital asset market.

However, despite the inflows, trading volumes dipped slightly by 3.1% compared to the previous week. This suggests that while investments are increasing, some investors may be waiting for clearer signals before significantly boosting their trading activity.

Geographically, the performance of digital assets showed mixed results. Switzerland saw the largest inflows since mid-2022, highlighting growing interest in digital investments across European markets. In contrast, Germany and Brazil recorded outflows of $21 million and $3 million, respectively, indicating some regional variations in investor sentiment.

As the largest cryptocurrency by market capitalization, Bitcoin was the main beneficiary of these inflows, attracting $1 billion. The influx of capital into Bitcoin also spurred interest in short-bitcoin investment products, which saw inflows of $8.8 million.

Although overall sentiment toward Bitcoin remains positive, some investors are hedging their bets, anticipating possible price corrections in the near future.

Ethereum, the second-largest cryptocurrency, broke its five-week streak of outflows by recording inflows of $87 million. This marks a significant resurgence in investor confidence, as Ethereum hadn’t seen such strong inflows since early August.

The performance of altcoins was mixed last week. Litecoin and XRP recorded positive inflows, attracting $2 million and $0.8 million, respectively. However, other major cryptocurrencies like Solana, Binance, and Stacks struggled. Solana faced $4.8 million in outflows, while Binance and Stacks saw outflows of $1.2 million and $0.9 million, respectively.

Click here for more comprehensive insights and news about Cryptocurrency