The global cryptocurrency market continues to attract significant investor interest as crypto investment products recorded significant inflows of funds last week.
According to the latest CoinShares weekly reportCrypto funds recorded net inflows of $2.19 billion globally, bringing year-to-date (YTD) net inflows to a record high of $33.5 billion.
The surge in inflows coincided with Bitcoin’s recent rally to a new all-time high of $93,477, which helped push CoinShare’s total assets under management (AUM) for crypto funds to approximately $138 billion.
Global distribution of crypto inflows and key trends
US funds mainly drove the inflow, accounting for $2.21 billion of the total weekly inflow. Other regions, including Hong Kong, Australia and Canada, contributed net inflows of $27 million, $18 million and $13 million, respectively.
On the other hand, investors in Sweden and Germany opted to take profits, resulting in regional net outflows of $58 million and $6.8 million, respectively. In the meantime. Bitcoin-based products continued to dominate the market, attracting $1.48 billion in net inflows worldwide this week.
The renewed interest in Bitcoin coincided with the price increase, but also saw a notable increase in short Bitcoin investment products, which received $49 million in new investments. This development reflects investors’ skepticism or hedging against potential price declines from recent highs.
Ethereum-based products, which have faced with challenges has shown signs of recovery in recent months by registering net inflows of $646 million globally.
CoinShares head of research James Butterfill highlighted that the turnaround may have been influenced by a mix of market factorsincluding a proposed network upgrade called the Beam Chain by Ethereum researcher Justin Drake and market optimism driven by the US elections. Ethereum inflows represented 5% of the asset’s total assets under management, indicating renewed investor confidence.
Behind the wave
Similar to the inflows into Ettherum, Butterfill also noted that last week’s overall spike in crypto fund inflows appears to be driven by a mix of market factors, including a shift in US monetary policy and the impact of the The great victory of the Republican party in the American elections.
Butterfill further revealed that while the week started with a net inflow of $3 billion in the first few days, it subsequently saw an outflow of $866 million following Bitcoin’s (ATH) all-time high.
Speaking of BTC’s ATH, after reaching its peak above $93,000 on November 13, BTC has seen a noticeable price correction.
Year to date, Bitcoin is down 2.8% from this ATH of $93,477, while currently trading at $90,334 at the time of writing, albeit up slightly by 0.2% over the past day.
Interestingly enough, in recent days since BTC began this correction, daily trading volume has also seen quite a significant drop in valuation, from over $70 billion last week to $59 billion today.
Featured image created with DALL-E, Chart from TradingView