Digital Asset Investment Products Regain Momentum with $136m Inflows, Bitcoin Dominates with $133m Inflows

In a significant turnaround for the digital asset market, investment products experienced a surge in inflows, according to the Digital Asset Fund Flows Weekly Report released by CoinShares. The report revealed that digital asset investment products witnessed inflows of US$136 million last week, bringing the total inflows over the past three consecutive weeks to an impressive US$470 million. This surge fully corrected the nine weeks of outflows that preceded it, resulting in year-to-date flows reaching a net positive of US$231 million.

Source: CoinShares

Despite the positive trend, trading turnover has slowed down in recent weeks. Investment products accounted for a total of US$1 billion for the week, which is significantly lower than the average of US$2.5 billion recorded in the previous two weeks. This decline in trading volumes may be attributed to seasonal effects, as lower activity is typically observed during the summer months of July and August.

Unsurprisingly, Bitcoin remained the primary focus among investors, with inflows amounting to US$133 million last week. This continued interest in Bitcoin further solidifies its position as the preferred digital asset over altcoins. In contrast, short positions on Bitcoin experienced outflows of US$1.8 million, marking the 11th consecutive week of such outflows.

Ethereum, the second-largest cryptocurrency by market capitalization, saw modest inflows of US$2.9 million. However, these inflows have only had a marginal impact on improving investor sentiment towards Ethereum. Over the past three weeks, inflows accounted for a mere 0.2% of total assets under management (AuM), compared to Bitcoin’s 1.9%. Year-to-date, Ethereum remains in a negative net flows position of US$63 million. Short positions on Ethereum also experienced minor outflows of US$0.3 million.

Source: CoinShares

Among the various altcoins, Solana, XRP, Polygon, Litecoin, and Aave witnessed significant inflows. Conversely, both Cosmos and Cardano experienced minor outflows.

Interestingly, blockchain equities attracted substantial inflows, reaching a total of US$15 million. This represents the largest inflow for this asset class in a year. The growing interest in blockchain equities indicates that investors are recognizing the potential of blockchain technology beyond just cryptocurrencies.

The recent surge in inflows to digital asset investment products reflects a renewed confidence and interest in the digital asset market. While Bitcoin continues to dominate investor attention, other cryptocurrencies like Ethereum are still struggling to attract significant inflows. The positive reception of blockchain equities highlights a broader recognition of the potential of blockchain technology in various industries. As the summer months typically bring lower trading volumes, it will be interesting to observe how the market develops in the coming weeks.

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