TL;DR
- Investment flows into digital assets hit $2.2 billion last week, marking a record $33.5 billion in inflows so far this year.
- Bitcoin’s record price drove both positive inflows and outflows, with $866 million in divestments by the end of the week.
- Ethereum showed signs of recovery, with inflows of US$646 million, driven by the proposed improvements to its network.
Over the past week, digital assets have seen a significant surge in investment flows, reaching a total of US$2.2 billion.
This growth has pushed total investment flows so far this year to a record US$33.5 billion, with assets under management (AuM) hitting a new high of US$138 billion.
The information comes from CoinShares Research‘s weekly report, which highlighted how the first half of the week benefited from substantial inflows, while the second half saw a reversal as Bitcoin hit all-time highs.
During the first part of the week, digital assets were well received, with an inflow of US$3 billion.
However, the second half was marked by a drop in investments, reaching outflows totaling US$866 million, driven mainly by the performance of Bitcoin.
The largest cryptocurrency on the market managed to surpass its all-time high price, which generated a wave of sales by investors who decided to take profits.
Despite these outflows, the overall picture remains positive, with Bitcoin receiving inflows of US$1.48 billion, although short-term investment products were also seen with US$49 million.
As for Ethereum, the cryptocurrency has managed to overcome its recent negative phase.
The inflows of US$646 million, representing 5% of assets under management, suggest a recovery driven both by the optimism generated by the upgrade of its Beam Chain network, and by the favorable context of the recent elections in the US.
This surge in investment in Ethereum has been particularly important as it reflects a shift in investor perception, who had previously been more cautious about the cryptocurrency.
DRIVING FACTORS OF RECOVERY
The recent surge in flows into Ethereum and other cryptocurrencies, such as Solana, is due to a number of factors including looser monetary policy and the impact of the election results in the US.
The Republican Party‘s victory has raised expectations of a more favorable environment for digital assets, which has attracted new investors.
Furthermore, Justin Drake’s proposed upgrade for the Ethereum network has also played a crucial role in changing the outlook on the cryptocurrency.
The outlook in regional markets has also been mixed.
While the US has led the inflows with US$2.2 billion, other countries such as Hong Kong, Australia and Canada have also seen inflows, albeit to a lesser extent, with US$27 million, US$18 million and US$13 million respectively.
In contrast, markets such as Sweden and Germany have seen capital outflows, with US$58 million and US$6.8 million, suggesting that some investors are choosing to take profits at a time of volatility.
Despite outflows in some markets, the overall investor sentiment remains positive, driven by global monetary flexibility and the continued development of the cryptocurrency market.
While cryptocurrencies like Bitcoin and Ethereum dominate the scene, other coins like Solana are also starting to attract more attention, which may be indicative of a shift towards broader diversification in digital asset investing.
This favorable environment could continue to drive growth in the sector, resulting in more investment flows and greater opportunities in the near future.
