Crypto ETPs Gain $47 Million Despite Bitcoin Sell-Off

Cryptocurrency exchange-traded products (ETPs) recorded a surprising $47 million in inflows last week, despite a significant sell-off in Bitcoin investment products. This unexpected development can be attributed to a combination of factors, including inflows into other digital assets, inflows from specific countries, and investor sentiment.

Firstly, while Bitcoin saw substantial outflows, other digital assets attracted notable investments. Ethereum, for instance, recorded the biggest outflows last week, totaling $256 million. However, this should be attributed to a broader tech sell-off rather than any specific issue with the asset. On the other hand, XRP saw substantial crypto ETP inflows of $41 million, driven primarily by political and legal factors, with inflows suggesting heightened optimism ahead of the US Securities and Exchange Commission's appeal deadline on January 15. Altcoins like Aave, Stellar, and Polkadot also attracted notable investments despite poor price performance, recording inflows of $2.9 million, $2.7 million, and $1.6 million, respectively.

Secondly, inflows from specific countries contributed to the overall inflows in crypto ETPs. While the US continued to be the biggest contributor with $79 million in inflows, other countries also contributed to the inflows. Germany and Canada totaled inflows of $52 million and $37 million, respectively. Although Switzerland led the outflows at $85 million, this was offset by inflows from other countries.

Lastly, investor sentiment played a crucial role in the $47 million inflows in crypto ETPs. Despite the Bitcoin sell-off, investors may have maintained a positive sentiment towards the crypto market as a whole, leading to inflows into other digital assets and contributing to the overall inflows. This positive sentiment can be attributed to the post-US election honeymoon period, which contributed to the substantial inflows into crypto ETPs, particularly in the second trading week of 2025.

In conclusion, the $47 million inflows in crypto ETPs despite the Bitcoin sell-off can be attributed to a combination of factors, including inflows into other digital assets, inflows from specific countries, and investor sentiment. This unexpected development highlights the resilience and diversity of the crypto market, as investors continue to allocate funds to the sector despite the volatility in Bitcoin prices. As the market continues to evolve, it will be interesting to see how these factors influence investor behavior and the overall dynamics of the crypto ETP market.