TL;DR
- Digital asset investment products recorded total inflows of $1.06 billion in one week.
- The rebound reverses four consecutive weeks of outflows and was driven by FOMC comments.
- XRP saw its largest recorded weekly inflows, reaching $289 million.
Sentiment in the digital asset market has dramatically shifted. The four-week consecutive streak of capital outflows, totaling up to $5.7 billion, has reversed. Last week, digital asset investment products (EIPs) recorded weekly digital asset fund inflows totaling $1.06 billion (USD), signaling a strong return of investor confidence.
The change comes right after comments from John Williams, a member of the Federal Open Market Committee (FOMC), who affirmed that monetary policy remains restrictive, reigniting hopes for a potential interest rate cut this month.
Despite low ETP trading volumes, at $24 billion (in contrast to the record $56 billion of the previous week, likely due to the Thanksgiving holiday), capital flowed massively into investment products.
US Dominance in Crypto Capital Inflows
Among the driving factors, geographically, the United States was the main driver of these weekly digital asset fund inflows, contributing $994 million of the total. Other countries with notable inflows included Canada ($97.6 million) and Switzerland ($23.6 million). Conversely, Germany was one of the few countries that registered outflows, totaling $57.3 million.
Regarding assets, Bitcoin (BTC) led the movement, attracting $461 million. Investors not only injected capital but also reversed bearish bets, as indicated by the $1.9 million outflows from short-Bitcoin ETPs. Ethereum (ETH) also benefited from improved sentiment, recording weekly digital asset fund inflows worth $308 million.
However, the unexpected protagonist was XRP, which reached $289 million, one of its largest recorded weekly inflows. This six-week consecutive streak of inflows for XRP represents 29% of its assets under management (AuM) and is likely associated with recent US ETF launches.
On the other side of the coin, Cardano (ADA) was the main loser, with outflows of $19.3 million, equivalent to 23% of its AuM.
In summary, the strong flow of weekly digital asset fund inflows underscores the sector’s resilience amid favorable macroeconomic tailwinds.
