Global Investment Trends
Global crypto investment products experienced a substantial turnaround last week, recording $921 million in net inflows. This marks a significant reversal from the previous week's $513 million in outflows. The positive shift in investor sentiment is largely attributed to lower-than-expected inflation data released on Friday, which has bolstered confidence regarding potential interest rate cuts later this year.
Bitcoin Dominates Inflows
Bitcoin investment products were the primary driver of these inflows, attracting $931 million in new capital last week. This brings the total inflows into Bitcoin products to $9.4 billion since the Federal Reserve began its rate-cutting cycle. While year-to-date inflows for Bitcoin funds currently stand at $30.2 billion, they still trail behind the $41.6 billion total recorded in 2024.
James Butterfill, Head of Research at CoinShares, noted in a recent report that the ongoing U.S. government shutdown has limited the availability of key macroeconomic data. This absence of crucial information has left investors with reduced guidance on the future direction of U.S. monetary policy. Despite this uncertainty, the Consumer Price Index for September showed a 0.3% increase, with the annual inflation rate at 3%, both figures coming in below expectations.
Trading Volumes and Regional Performance
Trading volumes for digital asset exchange-traded products remained strong, averaging $39 billion weekly, which is considerably higher than this year's average of $28 billion. U.S. market products were particularly strong, accounting for $843 million in inflows. Germany-based funds also saw robust performance, attracting $502 million, one of their largest weekly inflows on record.
Conversely, products in Switzerland experienced net outflows totaling $329 million. However, this was primarily due to an asset transfer between providers rather than significant selling pressure. Within the U.S. market, spot Bitcoin exchange-traded funds alone registered $446.3 million in net inflows, with BlackRock's IBIT leading the way with $324.3 million.
Ethereum and Altcoin Performance
Ethereum products experienced their first net outflows in five weeks, with $169 million exiting the market. This occurred amidst consistent daily outflows throughout the week. U.S.-based spot Ethereum ETFs were the main contributors to this exodus, with $243.9 million in weekly outflows, though inflows from other regions helped to partially offset this. Butterfill also highlighted that 2x leveraged ETPs continue to be a popular investment choice.
Other altcoin ETPs, including those for Solana and XRP, saw a deceleration in weekly inflows. Solana ETPs recorded $29.4 million in inflows, a decrease of over 81% from the previous week, while XRP ETPs attracted $84.3 million. This slowdown in altcoin inflows comes ahead of anticipated U.S. ETF launches for these assets.
Market Rebound and Overall Assets
Last week, both Bitcoin and Ethereum saw a rebound, with prices rising 3.5% and 3.1%, respectively. The majority of these gains were realized during a short liquidation surge on Sunday. As a result of these inflows and market movements, the total assets under management in crypto funds reached $229 billion. The year-to-date inflow figure for crypto funds now stands at $48.9 billion.