Crypto ETPs Surge with Record Inflows Amid Market Optimism

By: Eliza Bennet

The cryptocurrency market continues to captivate investors as recent data from CoinShares reveals crypto exchange-traded products (ETPs) have observed an impressive inflow of $3.3 billion last week, bringing the year-to-date total to a record $10.8 billion. This significant surge in investments underscores the growing appetite for digital asset products, as investors seek diversification amid concerns around the global economic landscape.

The report highlights that Bitcoin-backed ETPs have been at the forefront of this investment wave. Drawing in $2.9 billion last week, Bitcoin continues to assert dominance, with year-to-date inflows now reaching $10.1 billion. The recent rally has boosted Bitcoin ETPs assets under management to nearly $160 billion, as the leading cryptocurrency hit an all-time high of over $111,000. Despite this bullish trend, some investors are placing bets against Bitcoin’s price, with these short products seeing inflows of $12.7 million, the highest since December last year.

Alongside Bitcoin, Ethereum-based products have also maintained strong momentum. With weekly inflows of $326 million, Ethereum has recorded its fifth consecutive week of gains. The recent success is attributed to the Ethereum Pectra upgrade, which has rejuvenated market optimism and attracted a net inflow of $568 million in Ethereum-focused investment funds this month. While Bitcoin and Ethereum enjoy triumphant trajectories, the larger cryptocurrency landscape paints a varied picture. XRP products recorded a historical $37.2 million in outflows last week, ending an 80-week inflow streak amid growing institutional involvement.

The dynamics within the digital asset market demonstrate divergent trends among various cryptocurrencies. While most altcoins saw modest engagement, with Solana and Sui attracting $4.3 million and $2.3 million respectively, this interest was tempered by the unfolding events such as DeFi exploits on certain networks. The broader outlook for crypto investment products remains optimistic, driven by an increasing demand for diversification and hedging amid prevailing economic uncertainties.