Digital asset investment products saw massive inflows of $921 million last week. This rebound follows weaker-than-expected inflation data in the U.S. Monday’s report from CoinShares attributes this to renewed hopes for rate cuts. The crypto investment product flows show a renewed appetite for risk.
Bitcoin was the clear protagonist of the week, consolidating its dominance. The asset led demand with $931 million in net inflows. This figure demonstrates strong confidence in the main crypto asset. However, Ethereum showed an opposite and concerning trend. ETH products recorded outflows of $169 million. It is important to note that this is its first net outflow in five weeks, breaking a positive streak. Overall trading activity also remained robust. Global ETP (Exchange-Traded Product) volumes reached $39 billion. This figure far exceeds the weekly average for the year, set at $28 billion.
Market optimism is anchored in the global economy. Lower-than-expected inflation (CPI) data in the United States boosted investor confidence. Traders now see it as more likely that the Federal Reserve will cut interest rates later this year. This looser monetary policy typically benefits risk assets like cryptocurrencies. Regionally, the U.S. dominated inflows with $843 million. Germany also provided a positive surprise, recording $502 million. This is one of its largest weekly totals on record. In contrast, Switzerland showed net outflows of $359 million. However, CoinShares clarifies that this is due to asset transfers between providers and not active selling based on negative market sentiment.
Is Institutional Capital Abandoning Ethereum for Bitcoin?
The divergence between Bitcoin and Ethereum is the week’s most notable data point. While spot Bitcoin ETFs are gaining traction, Ethereum’s are visibly faltering. Ether ETFs recorded their second consecutive week of significant outflows, totaling $243.9 million in withdrawals, according to separate data from SoSoValue. BlackRock’s ETHA ETF was the most affected, leading these outflows with $100.99 million. In contrast, spot Bitcoin ETFs saw renewed and strong demand. They attracted $446 million net during the same period. BlackRock’s IBIT and Fidelity’s FBTC led this recovery, with $32.68 million and $57.92 million, respectively.
This capital rotation suggests a more selective approach by investors. They seem to favor Bitcoin as the primary macroeconomic hedge against inflation and monetary policy. Although Ethereum faces short-term pressure, the CoinShares report notes that demand for leveraged (double) ETH ETPs remains strong. Other major assets like Solana and XRP saw reduced inflows. Their flows were $29.4 million and $84.3 million, respectively. Investors remain expectant of future spot ETF launches in the U.S. for these alternative assets. The crypto market remains highly sensitive to upcoming economic indicators.
