Digital Asset Funds See 11th Straight Week of 16.9 Billion Inflows Led by Bitcoin

Digital asset funds experienced a significant inflow of $2.7 billion last week, marking the 11th consecutive week of gains and bringing the total to $16.9 billion. This sustained positive momentum reflects a robust investor appetite for digital assets, mirroring the strong performance observed in the first half of 2024. The continued investor interest is likely tied to a mix of increased geopolitical tensions and the current “uncertainty” around monetary policy, both of which are driving demand for digital assets.

Bitcoin was the standout performer, capturing 83% of the total inflows, which amounted to $2.2 billion. This substantial allocation underscores Bitcoin's dominance in the crypto market and investor confidence in its prospects. Short-Bitcoin products continued to see outflows, with $2.9 million exiting last week, which pushed year-to-date outflows to $12 million. This essentially indicated a positive sentiment around Bitcoin. Ethereum followed with $429 million in inflows, while other cryptocurrencies like Solana attracted comparatively modest investments, highlighting the disparity in investor sentiment. XRP also secured $10.6 million last week, bringing its yearly inflows to $219 million. While Solana recorded $5.3 million in weekly inflows, its year-to-date tally remains at $91 million. Next up was Sui, which attracted $1.4 million in inflows last week, reaching $4.7 million so far this year. Chainlink and Cardano saw weekly minor inflows of $0.8 million and $0.7 million, respectively, which pushed their year-to-date totals to $24 million and $10 million. Multi-asset products added a modest $0.2 million last week, totaling $58 million in inflows for the year, while Litecoin’s YTD inflows stand at $5 million.

The United States led the surge in inflows, contributing $2.65 billion. Other regions, such as Switzerland and Germany, recorded modest additions, while Canada and Brazil posted small outflows. The data indicates a strong preference for Bitcoin, with short-Bitcoin products continuing to see outflows, signaling a broad optimism for the cryptocurrency's future. Inflows last week were largely driven by the US, which recorded $2.65 billion, while Switzerland and Germany saw smaller inflows of $23 million and $19.8 million. Australia added $8.7 million. In contrast, Sweden saw outflows of $15.9 million, while Canada, Brazil, and Hong Kong recorded outflows of $13.6 million, $2.4 million, and $2.3 million, respectively.

The inflows into Bitcoin ETFs outpaced those into gold ETFs, with $3 billion in Bitcoin ETF inflows compared to $1 billion in gold ETF outflows over five days. This shift suggests that investors are increasingly viewing Bitcoin as a better hedge against traditional U.S. assets, particularly in the face of geopolitical tensions and monetary policy uncertainties. The rising interest in spot Bitcoin ETFs is also driven by accelerating corporate adoption. For instance, Anthony Pompliano’s ProCap BTC acquired 3,724 Bitcoin for $386 million as part of plans to go public through an SPAC merger. Similarly, Japan’s Metaplanet raised $517.8 million on the first day of its ambitious “555 Million Plan,” targeting 210,000 Bitcoin by 2027.

The positive sentiment extended to other cryptocurrencies as well. Ethereum and Solana rallied on hopes that REX Shares’ ETH and SOL staking ETFs could soon win SEC approval, offering institutions new ways to earn crypto yield. This development could further boost investor confidence and drive additional inflows into the crypto market. Overall, the sustained inflows into digital asset funds, led by Bitcoin, reflect a growing investor appetite for cryptocurrencies. The data underscores the resilience of the crypto market and its potential to attract significant capital, even in the face of macroeconomic uncertainties.