A recent Coindesk report indicates that digital asset investment products experienced their largest single weekly inflows in a year, largely due to bitcoin-related products. This comes after nine consecutive weeks of outflows, signalling a change in market sentiment. Bitcoin-related products took the lion’s share, with inflows of $188 million, accounting for 94% of total flows. Meanwhile, short-bitcoin products saw an outflow of $4.9 million for the ninth consecutive week.
The turnaround in investments can be attributed to several high-profile institutions filing for exchange-traded funds (ETFs) recently, as well as bitcoin’s price reaching a one-year high. Amongst these institutions, asset management giant BlackRock submitted an application for a spot bitcoin ETF on June 15. Other traditional finance firms, such as Invesco and WisdomTree, also re-filed for similar products.
According to the report, the positive sentiment driving these recent investments may be linked to the filings for physically-backed ETFs with the U.S. Securities & Exchange Commission by high-profile ETP issuers. This is further supported by the fact that inflows reached a total of $199 million, effectively reversing almost half of the prior nine consecutive weeks of outflows. Exchange Traded Product (ETP) trading volumes amounted to $2.5 billion for the week.
While the overwhelming preference for bitcoin is evident, Ethereum also experienced inflows of $7.8 million. However, this amounted to a mere 0.1% of assets under management (AUM), compared to bitcoin’s 0.7% inflows, suggesting that investors are less keen on Ethereum than bitcoin at present.
In a somewhat unexpected turn of events, this renewed enthusiasm did not extend to altcoin investments. According to the report, only minor inflows were observed for XRP and Solana, totaling $0.24 million and $0.17 million respectively. Nevertheless, the overall positivity prompted some investors to purchase multi-asset investment ETPs, with $8 million in inflows recorded last week.
While it remains to be seen whether this bullish trend will persist, the recent developments in the digital asset space bring forth critical questions around investor appetite and the future of alternative cryptocurrencies. As digital asset investment products continue to evolve, and more institutional players enter the market, the balance between bitcoin, Ethereum, and altcoins may shift either in favor or against the prevailing sentiment. As always, the world of cryptocurrency remains an exciting and unpredictable arena, with countless opportunities for success and disappointment alike.
Source: Coindesk
