Digital Asset Investment Products See Largest Inflows in Two Months as Bitcoin Funds Lead with $1 Billion Inflows

Digital asset investment products recorded an increase in inflows in the previous week. This was the largest such increase in two months.

CoinShares reported that investors poured $1.2 billion into digital asset investment products in the previous week, marking the largest seven-day increase in inflows in two months.

The vast majority of the capital went into Bitcoin funds, which saw a total of $1 billion in inflows. CoinShares said that this was likely driven by positive expectations about the monetary policy and the changes in the US regulatory environment.

Indeed, the U.S. Securities and Exchange Commission (SEC) recently gave the green light to physically settled options linked to BlackRock’s physically settled Bitcoin ETF (IBIT), which had a positive impact on investor confidence in this sector.

Moreover, seven U.S.-based funds saw a combined total of $1.1 billion in inflows, while Swiss-based funds saw $84 million, and Canadian funds saw $20 million. On the other hand, Germany-based and Brazil-based funds saw outflows of $21 million and $3 million, respectively.

Overall, the divergence in inflows and outflows across different regions highlights that while global investors are showing increasing interest in digital assets, sentiment still differs between markets.

In terms of specific cryptocurrencies, Bitcoin (BTC) went up 3.5% in value over the period to $63,456, but fell 3.12% in the last 24 hours of the report.

Meanwhile, Ethereum (ETH) investment products saw seven weeks of outflows, before finally recording net inflows of $87 million, marking the first positive movement since early August.

The rebound is significant as there were fears that institutional investors were losing interest in Ethereum following large redemptions in the past few weeks.

For example, on September 23, Ethereum ETFs had outflows of $79 million, and Grayscale’s Ethereum ETF was the biggest contributor to outflows.

However, interest in U.S.-based Ethereum funds picked up last week, with U.S. spot Ethereum ETFs contributing $85 million of the total inflows.

This made it the greatest weekly inflow for Ethereum products in two months. Nevertheless, the price of Ethereum remained under some pressure, and was trading at $2,600.34 at the time of writing, with a seven-day loss of 1.94%.

Among altcoins, Solana funds saw the biggest outflows of $4.8 million, while Litecoin and Ripple recorded a net inflow of $2 million and $0.8 million, respectively.

On the other hand, Binance Coin and Stacks saw outflows of $1.2 million and $0.9 million, respectively.

The divergence in inflows and outflows for altcoins highlights that although interest in Bitcoin and Ethereum is picking up again, altcoins are still a more volatile asset class.

The driving force behind the latest inflows seems to be investors’ expectations of a change in the Federal Reserve’s stance to a more accommodative one.

As the Federal Reserve slashes interest rates and it is expected to cut further, investors have turned to digital assets as an investment option.

As a result, there has been a 6.2% growth in the overall asset under management (AUM) across the industry as highlighted by CoinShares.

However, as the inflows (showing increasing investor confidence) are still comparatively recent, it remains uncertain as to how long this trend will continue, particularly given the volatility of trading volumes and the differing attitudes in different areas.

As the U.S. Monetary Policy remains the key driver to the market movement, Digital asset funds may remain popular, especially with more regulatory advancements like more Bitcoin and Ethereum ETFs coming to the market.

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