Last week, digital asset investment products like Bitcoin and Ethereum experienced a significant increase, with total inflows reaching $346M. This marks the largest weekly inflow during the current 9-week streak. The surge in inflows is largely driven by the expectation of a spot-based ETF launch in the US, a trend reminiscent of the late-2021 bull market.
As a result of the combined effect of price increases and inflows, the total assets under management (AuM) have now reached a peak of $45.3B, a level not seen in over 18 months. Canada and Germany were the major contributors to the total inflows, with contributions of $199.1 million and $101.5 million respectively, making up 87% of the total.
The United States, on the other hand, saw a more modest inflow of $30 million, likely due to investors awaiting the launch of a spot-based Exchange-Traded Fund (ETF) in the country. Despite this, the U.S. leads in terms of assets under management, boasting a substantial $33.1 billion, which is more than tenfold the amount of the next highest country.
Bitcoin and Ethereum Attract Most of the Capital with $345M Inflows
Last week, Bitcoin experienced inflows amounting to $312M, pushing the total inflows for the year just over the US$1.5B mark. Meanwhile, short-sellers are increasingly backing down, with the third consecutive week of outflows totaling $0.9M.
This has resulted in a 61% decrease in assets under management (AuM) since its peak in April 2023. The use of Exchange-Traded Products (ETPs) to gain exposure to Bitcoin remains high, with ETP volumes accounting for 18% of total spot Bitcoin volumes last week, well above the average.
Ethereum mirrored this trend with inflows of $33.5 million, culminating in a four-week sum of $103 million. This pattern effectively offsets the outflows seen earlier in the year and marks a significant change in investor sentiment towards Ethereum, the digital asset with the second-largest market capitalization.
The relatively smaller yet noteworthy capital inflows into other digital currencies such as Solana, Polkadot, and Chainlink suggest a broadening investment interest within the industry. The continued utilization of Exchange-Traded Products (ETPs) underscores a growing inclination toward using regulated financial instruments for gaining exposure to cryptocurrencies. Last week, ETPs represented 18% of the total spot Bitcoin volumes, further emphasizing this trend.