Digital asset investment products maintained their positive momentum last week, recording a net inflow of 716 million dollars according to the latest report from CoinShares. James Butterfill, the firm’s head of research, highlighted that Crypto ETPs continue to attract institutional capital despite macroeconomic data in the United States alluding to persistent inflationary pressures.
The report details an interesting dispersion in capital flows by asset and provider. While Bitcoin led the market capturing 352 million dollars, XRP surprised with solid inflows of 244 million. However, the most outstanding data was for Chainlink, which recorded a historical record of 52.8 million in inflows, representing an astounding 54% of its assets under management. On the other hand, in the realm of issuers, ProShares topped the positive list with 210 million, contrasting with BlackRock, the largest manager by assets, which experienced outflows worth 105 million dollars during the same period.
This financial movement marks an 8% rebound from November lows, lifting total assets under management above 180 billion dollars. It is fundamental to note that this recovery comes after a turbulent period where the market suffered a massive sell-off of 5.5 billion in four weeks. Although current figures are encouraging, the total volume managed still remains significantly below the all-time high of 264 billion, indicating that the market is still in a phase of rebuilding confidence following recent volatility.
Are institutional investors regaining confidence despite inflationary pressure?
The behavior of flows suggests a shift in investor sentiment towards a more constructive stance. Outflows of 19 million dollars in short Bitcoin products could indicate a notable decrease in negative bearish sentiment. Furthermore, disproportionate interest in altcoins like Chainlink and XRP signals a diversification of risk appetite beyond the cryptocurrencies market leader. Geographically, the trend was global, with the United States, Germany, and Canada leading inflows, accumulating 483 million, 97 million, and 80.7 million respectively, which reinforces the narrative of a coordinated recovery in major financial markets.
The digital asset market appears to be stabilizing following the previous month’s corrections, showing resilience against mixed economic data. Looking ahead, it will be crucial to monitor if this trend of inflows into Crypto ETPs is maintained in the face of upcoming monetary policy decisions. If interest in alternative assets like Chainlink persists and outflows from short products continue, we could be facing the beginning of a broader and more sustained institutional accumulation cycle to close the year.
