Digital Asset Products See $176M in Inflows, Ethereum Leads the Pack
Why Trust Cryptonews
The digital asset market saw a significant rebound last week, with investment products drawing in $176 million in inflows as investors capitalized on recent price dips.
The influx comes after a period of market correction that had slashed the total Assets under Management (AuM) in these products by over $20 billion, bringing them down to $75 billion, according to a report from CoinShares.
However, a subsequent recovery has since pushed the AuM back up to $85 billion.
Trading Activity in ETPs Surges
Trading activity in Exchange-Traded Products (ETPs) surged during this period, with $19 billion in transactions recorded, well above the year-to-date weekly average of $14 billion.
The increased trading volume suggests heightened investor interest and activity following the recent market downturn.
“Unusually, every region saw inflows last week suggesting unanimous positive sentiment towards the asset class following the recent price correction,” the report said.
The United States led the charge with $89 million in inflows, followed by Switzerland ($20 million), Brazil ($19 million), and Canada ($12.6 million).
Despite this optimism, the U.S. remains the only country to have experienced net outflows for the month, totaling $306 million.
It is worth noting that Ethereum emerged as the primary beneficiary of the market’s rebound, attracting $155 million in inflows last week.
This brings Ethereum’s year-to-date inflows to $862 million, marking the highest level of investment since 2021.
The strong performance is largely attributed to the recent launch of U.S. spot-based ETFs, which have bolstered investor confidence in Ethereum.
Bitcoin (BTC), on the other hand, had a mixed week.
The cryptocurrency started with outflows but managed to reverse this trend in the latter part of the week, ultimately recording $13 million in inflows.
Meanwhile, short Bitcoin ETPs saw substantial outflows, with $16 million (or 23% of their AuM) being withdrawn.
Bitcoin Experiences Significant Volatility
Bitcoin ended the week at around $58,700, marking a modest 0.9% increase from the previous week’s close.
The cryptocurrency experienced significant volatility, dipping as low as $49,000 before rebounding and stabilizing above $50,000.
This price action reflects the ongoing uncertainty in the digital assets market, driven by geopolitical tensions and economic unpredictability.
Ethereum also saw positive momentum in its spot ETFs, which recorded $105 million in inflows despite the broader market’s challenges.
Although total flows since inception remain negative, with $405 million in outflows, the outlook for Ethereum spot ETFs is increasingly optimistic.
The newly launched ETFs have attracted nearly $1.9 billion in net inflows, offsetting the $2.3 billion in outflows from the Grayscale Ethereum Trust (ETHE).
In a recent note, Matteo Greco, a research analyst at digital asset investment firm Fineqia International, said total open interest in Bitcoin has dropped by about 12%, from $4.6 billion to $4.1 billion, since the end of July.
“A reduction in leverage, while leading to short-term price declines, is often viewed positively by markets as it reduces the risk of over-leveraging, which could result in a more severe market correction if growing more and reaching non sustainable levels,” he wrote.
