Crypto Inflows Surge Despite Global Tensions

By: Eva Baxter

In an impressive display of investor confidence, digital asset investment products have continued their remarkable run with ten straight weeks of inflows, bolstering a record year-to-date (YTD) influx of funds. According to recent data published by CoinShares, these products brought in $1.24 billion last week alone, pushing the YTD total to an unprecedented $15.1 billion. This influx comes amidst heightened geopolitical tensions, most notably the conflict between Israel and Iran, which has affected trading dynamics across asset classes globally, including cryptocurrencies.

Despite the volatility induced by these geopolitical risks, institutional interest in digital assets remained robust. James Butterfill, CoinShares' Head of Research, highlighted that despite an initial surge in activities at the week's start, investor sentiment cooled towards the latter due to the impact of the US Juneteenth holiday and emerging narratives concerning potential US involvement in the Iran conflict.

Bitcoin continues to spearhead these inflows, capturing a majority share with $1.1 billion in assets just last week. Remarkably, US-based spot Bitcoin exchange-traded funds (ETFs) have played a pivotal role, accounting for $1.02 billion of these inflows. The standout performer was BlackRock’s iShares Bitcoin Trust (IBIT), which attracted $1.23 billion in new funds, raising its total holdings to over $74 billion. Conversely, short-Bitcoin products saw minor outflows, illustrating reduced bearish sentiment.

Ethereum sustained its momentum as well, with inflows extending for the ninth consecutive week, totaling $124 million last week. This trend is largely attributed to the recent Pectra upgrade and rising institutional interest, further highlighted by continued inflows into spot Ethereum ETFs, which have logged steady investments over the past month. Altcoins like Solana and XRP also benefited from the market’s resilience, netting $2.78 million and $2.69 million respectively, underscoring persistent although cautious investor appetite for alternative Layer 1 protocols.

These trends reflect ongoing confidence in cryptocurrency as a viable asset class, even in times of global economic uncertainty. Bitcoin and Ethereum remain at the forefront of this digital asset wave, acting as a store of value and a hedge against macroeconomic fluctuations.