Ethereum has emerged as a clear winner amidst the recent market downturn, with investors capitalizing on the price weakness to boost the inflows into the cryptocurrency. Data from CoinShares indicated that Ethereum attracted a staggering $155 million in inflows over the past week, bringing its year-to-date total inflows to $862 million – the highest since 2021. The surge in inflows can be largely attributed to the introduction of US spot-based ETFs, which have heightened investor interest in Ethereum.
While Ethereum has taken the spotlight, other cryptocurrencies have also experienced positive sentiments from investors. Bitcoin, for instance, witnessed an increase in inflows by the end of the week, despite initial outflows at the beginning. The weekly total inflows for Bitcoin amounted to $13 million. On the flip side, short Bitcoin ETPs faced their largest outflows since May 2023, totaling $16 million, which led to a significant decrease in short positions’ Assets under Management (AuM) to the lowest level of the year.
The positive trend extends beyond Ethereum and Bitcoin to other cryptocurrencies as well. Investment products related to Solana, XRP, and Cardano received weekly inflows of $4.5 million, $0.7 million, and $0.6 million, respectively. This collective influx of funds into various digital asset products indicates a widespread perception among investors that recent price declines present an opportunity for strategic investment.
Despite the market correction that led to a significant drop in Total Assets under Management (AuM) to $75 billion, the sentiments have since rebounded, reaching $85 billion according to CoinShares’ estimates. A notable surge in trading volume in Exchange-Traded Products (ETPs) was also observed, with a weekly total of $19 billion surpassing the $14 billion average for the year. What’s more, inflows from all regions were reported last week, signifying a global optimism towards the asset class following the recent dip in prices.
The influx of funds from various regions contributed to the overall positive outlook on cryptocurrencies. The US, Switzerland, Brazil, and Canada recorded the most significant inflows, totaling $89 million, $21.3 million, $20 million, and $19.2 million, respectively. In contrast, the US stood out as the only country with net outflows for the month, registering $306 million in outflows despite the overall boost in inflows across different regions.
The recent market downturn has, surprisingly, had a positive impact on Ethereum and other cryptocurrencies, attracting significant inflows from investors who perceived the price weakness as a buying opportunity. This surge in investor interest has not only bolstered the crypto market but has also signaled a shift in sentiment towards digital assets, highlighting the potential for future growth and development in the cryptocurrency space.
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