Cryptocurrency investment products experienced another week of inflows, despite the volatility that persisted across major digital assets, including Bitcoin and Ether. Global crypto exchange-traded products (ETPs) recorded $1.03 billion of inflows for the trading week ended Friday. With the fresh inflows, crypto ETPs continued breaking year-to-date (YTD) inflow records, setting a new historical high just under $19 billion. Assets under management (AUM) in crypto ETPs reached $188 billion, up from last week’s $184.4 billion, marking another new high.
Bitcoin led the inflows with $790 million, accounting for 76% of total crypto ETP inflows last week. However, BTC ETP inflows slowed from the previous three weeks, which averaged $1.5 billion of inflows weekly. This moderation in inflows suggests that investors are becoming more cautious as Bitcoin approaches its all-time high price levels. Ether ETPs followed with $225 million of inflows, marking an 11th consecutive week of inflows. On a proportional basis, weekly inflows during this run have averaged 1.6% of AUM, significantly higher than Bitcoin’s 0.8%, suggesting a notable shift in investor sentiment in favor of Ethereum.
The majority of crypto inflows last week were handled through BlackRock’s crypto funds, which saw $436 million in inflows, or 42% of all last week’s inflows by issuers. The strong performance of spot Bitcoin ETFs, which saw cumulative inflows of $769 million this week, further underscores the bullish outlook. This is a notable decrease from the previous week’s inflows of $2.2 billion, but it still represents a significant amount of capital flowing into the market. The pullback in Bitcoin’s price to $107,000, despite the $1 billion spot BTC ETF inflow, suggests that market participants are cautious about the broader economic outlook and the potential impact of dormant BTC wallets moving large amounts of Bitcoin.
Ethereum Spot ETFs have also seen a substantial increase in net inflows, with $1.17 billion added in June alone. This marks a significant shift in investor appetite for ETH exposure, as more investors seek to gain access to the Ethereum ecosystem. The inflows into Ethereum ETFs indicate that investors are not only interested in Bitcoin but also in other major cryptocurrencies, further diversifying their portfolios. The activation of six dormant Bitcoin whale wallets from 2011, each holding 10,000 BTC, has raised concerns about potential selling pressure. The movement of $8.6 billion worth of Bitcoin from these wallets could impact the market, as large transactions often lead to price volatility. However, the overall trend of increasing inflows into crypto funds suggests that the market remains resilient and that investors are willing to take on the risks associated with cryptocurrencies.
The recent performance of crypto funds highlights the growing acceptance and adoption of digital assets as a legitimate investment class. The influx of capital into these funds, coupled with the strong performance of spot ETFs, indicates that investors are increasingly comfortable with the volatility and risks associated with cryptocurrencies. As the market continues to evolve, it is likely that we will see further innovation and growth in the crypto space, with more investors seeking to capitalize on the potential returns offered by digital assets.
