The digital asset market has marked considerable growth this week, with product inflows witnessing a rise of $78 million, the highest since July, according to a fresh CoinShares market report. This tread change comes after a spate of outflows, prompted by dipping market values intertwined with regulatory uncertainty in the United States.
Exchange-traded products (ETPs) were not left on the sidelines with a growth jump of 37% in just seven days, pushing the total to a staggering $1.13 billion. This peak is particularly noteworthy, as it coincides with an increased investor enthusiasm for cryptocurrency products across a multitude of jurisdictions.
Bitcoin (BTC) emerged as the main beneficiary of the bullish trend, registering an inflow of $43 million. This is a turnaround from the recent past where outflows were the order of the day. Still in the Bitcoin realm, short positions gained $1.2 million, indicating a continued interest by institutional investors in the broader crypto ecosystem.
However, the growth narrative is not solely a Bitcoin affair. Ethereum (ETH) experienced a minor jump following the introduction of six exchange-traded funds (ETFs). But a sideways glance at the numbers tells a different story. The total $10 million inflow during the funds’ first week appears insignificant compared to Bitcoin’s behemoth $1 billion for the same period. To that end, this comparison underscores a less optimistic posture by institutional investors towards Ethereum, a stark contrast to their bullish stance in 2021.
The shift in institutional capital seems to be favoring Solana (SOL), the altcoin that has been gaining popularity in recent months. It recorded $24 million in outflows last week, the highest since March 2022, reinforcing its status despite the notable Ethereum developments. Solana’s prices are currently at rock bottom, down by 4% and dropping over 30% in the past year.
Regarding geographical distribution of inflows, Europe outshines the United States, with 90% of last week’s inflows originating from the region. Interestingly, US and Canada only managed to scoop up the meager remainder of $9 million. Germany and Switzerland were the dominant European nations, accounting for $37.3 million and $31.3 million respectively, making up a riveting 88% of the total weekly inflows.
This Europe-US divide seems to emanate from the clearer regulatory framework in Europe. Meanwhile, the US, with its regulatory ambiguities, grapples with a myriad of court cases involving principal financial watchdogs like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), not forgetting the crypto firms themselves.
Source: Cryptonews
