Cryptocurrency investment products have seen a notable surge in investor interest, recording significant inflows for four consecutive weeks. According to recent data from CoinShares, these products attracted approximately $598 million in investments last week alone.
These capital inflows have brought annual inflows to $5.7 billion, signaling the continued preference for digital assets among both institutional and retail investors.
It is noteworthy that amid this surge in investment, the introduction of new spot Bitcoin exchange-traded funds (ETFs) in the United States has primarily driven inflows. These ETFs quickly gained traction and attracted significant net flows.
James Butterfill, Head of Research at CoinShares, highlighted the importance of these inflows, noting that they account for 55% of the record inflows seen throughout 2021.
Regional trends and asset performance
This data also reveals interesting regional trends for cryptocurrency investments. US-based funds led the way with the largest inflows, totaling approximately $610 million. However, despite this positive momentum, Grayscale, the ‘current issuer’, experienced outflows of $436 million.
Meanwhile, Brazil and Switzerland recorded small inflows of $8.2 million and $2.1 million, respectively. Meanwhile, Canada recorded the largest outflow from digital asset investment products, amounting to nearly $20 million.
Bitcoin-based funds led the inflows, attracting $570 million in investments. The surge was dominated by the US spot Bitcoin ETF, which has amassed more than $5.5 billion in net flows since its launch earlier this year.
Ethereum products also experienced notable inflows totaling $17 million. Chainlink and XRP-based funds also saw significant inflows of $1.8 million and $1.1 million, respectively.
Cryptocurrency market outlook and investor sentiment
Despite the positive momentum in cryptocurrency investment products, certain assets have faced challenges. Solana investment products were leaked for two weeks in a row, totaling $3 million.
Butterfill attributed this downturn to recent temporary downtime in the network. Additionally, blockchain-related stocks continued to see outflows totaling $81 million. According to Butterfill, this indicates widespread caution among investors in current market conditions.
It is worth noting that the overall trajectory of the global cryptocurrency market is largely positive. In particular, the overall market capitalization of cryptocurrency recently exceeded $2 trillion, increasing by approximately 1% over the past 24 hours.
This surge in market capitalization can be attributed to the significant gains observed in cryptocurrencies such as Bitcoin, Ethereum, and other major digital assets in the market. Bitcoin has maintained a respectable growth rate of over 20% over the past month, despite experiencing a slight decline of 1.7% over the past week.
Featured image by Unsplash, chart by TradingView