Crypto Investment Products See $1.24 Billion Inflows Despite Price Drops

Major asset management companies, including BlackRock, Fidelity, and Grayscale, have witnessed substantial net inflows into their crypto-based investment products. Over the past week, these products attracted a total of $1.24 billion globally, marking the tenth consecutive week of net inflows. This period saw a total net fund inflow of $14.1 billion, setting a new benchmark for the year. Since the beginning of the year, total net inflows have reached $15.1 billion. The total asset size in the sector has risen to $176 billion, according to James Butterfill of CoinShares. Despite increasing geopolitical uncertainties, investors remain confident in crypto-based investment products. The regional distribution of net inflows was dominated by the US, which attracted $1.25 billion in net inflows last week alone. Canada and Germany followed with net inflows of $20.9 million and $10.9 million, respectively. Part of these positive flows was offset by net outflows of $32.6 million from products in Hong Kong and $7.7 million from Switzerland. In the US, spot Bitcoin Exchange-Traded Funds (ETFs) made up a significant portion of the total fund inflows, drawing in $1.02 billion by themselves.

Despite the price decline, Bitcoin-based investment products saw the second consecutive week of net inflows, with an additional $1.1 billion invested. This was interpreted as investors buying at lower prices, supported by a relatively small outflow of $1.4 million from Short Bitcoin products. Ethereum-based investment products recorded their ninth consecutive week of net inflows, adding another $124 million. This streak brought the total inflow to $2.2 billion, reflecting strong investor interest in the asset. However, US-based spot Ethereum ETFs accounted for only $40.3 million of this inflow, with most contributions coming from Ethereum-based products in other regions. In terms of price performance, Bitcoin decreased by 4.7% over the last week, trading at $101,660, while Ethereum dropped by 13.7%, trading at $2,255. The adoption of Bitcoin as a strategic reserve by companies like Metaplanet and in Texas prepares the ground for recovery once uncertainties diminish. Solana might perform better in recovery, and Ethereum has recovery potential despite short-term institutional support loss as volatility decreases.

Investment products based on Solana, XRP, Chainlink, Cardano, and Litecoin saw inflows of $2.8 million, $2.7 million, $600,000, $300,000, and $200,000, respectively. However, Altcoin Sui-based investment products faced an outflow of $500,000. BlackRock, the largest Bitcoin asset manager worldwide, continued to see major gains last week, accumulating more than 3% of the total BTC supply by June 20. BlackRock’s iShares exchange-traded funds (ETFs) led the inflows last week with about $1.3 billion of inflows, pushing YTD inflows past $15.5 billion. Other issuers such as ProShares and Bitwise saw minor inflows of $77 million and $33 million, respectively. ARK Invest and Fidelity Investments posted outflows from crypto ETFs last week, totaling $188 million and $62 million, respectively.

The Crypto Fear & Greed index briefly shifted to “Fear” on Sunday after maintaining “Greed” for the past month. On Monday, the index slightly recovered to “Neutral.” Though crypto ETP activity remained strong last week, the ETP sentiment cooled in the latter half of the week, likely due to the US Juneteenth holiday and emerging reports of US involvement in the Iran conflict. Both crypto ETPs and spot crypto prices held strong in the previous trading week, with ETPs posting $1.9 billion of inflows despite the escalation of the Israel-Iran conflict. The surge in inflows into crypto investment products highlights the growing institutional interest in crypto assets. Despite market turbulence, digital asset investment products saw $1.24 billion in inflows for the week ending June 20, marking the eighth consecutive week of positive inflows. This trend is a testament to the resilience of the crypto market and the confidence of institutional investors in the long-term potential of digital assets. The continued inflows into Bitcoin and Ether ETPs, despite price drops, suggest that investors are viewing these assets as long-term investments rather than short-term speculative plays. The significant gains seen by BlackRock and other major asset managers further underscore the growing acceptance of crypto assets in the mainstream investment community.