Investment Surge: $441M Inflows Recorded in Digital Asset Funds Amid ‘Price Weakness’

July 8, 2024

Despite negative market sentiment, digital asset funds have attracted $441 million in capital inflows as per the latest data by CoinShares Head of Research James Butterfill. Investors sent $398 million to Bitcoin, the leading cryptocurrency by market cap, with Solana and Ethereum seeing $16 million and $10 million in inflows, respectively.

Butterfill noted in his blog post that there has been a change in sentiment toward Ethereum, evidenced by a $10 million influx, yet it remains the sole exchange-traded product (ETP) with net outflows for the year.

“Bitcoin saw US$398m inflows but unusually represented just 90% of total inflows as investors chose to invest across a much broader set of altcoins. Most notable of which was Solana, seeing US$16m last week, bringing year-to-date (YTD) inflows to US$57m, making it the best performing altcoin from a flows perspective. Ethereum sentiment seems to have turned, seeing US$10m inflows, but remains the only ETP to have seen net outflow YTD,” Butterfill wrote.

Source: CoinShares

The report pointed out that the surge of inflows came as a result of “price weakness” caused by recent activities related to Mt. Gox and the German government, which were perceived as a favorable buying opportunity for investors.

In terms of regional inflows, the United States dominated with $384 million, while Hong Kong, Switzerland, and Canada contributed significantly, with $32 million, $24 million, and $12 million, respectively. Germany was an exception, experiencing outflows of $23 million.

Source: CoinShares

This development coincides with the recent dip in Bitcoin’s price to levels not seen since February and the shift in sentiment in the overall crypto market toward a more bearish outlook.

Bitcoin has seen a decrease in value in the past week, while the Standard and Poor’s 500 (S&P 500) is heading toward a new record high. This pattern reminds some market participants of the correlation between cryptocurrency and traditional stocks prior to the onset of the COVID-19 crisis.

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Malaya has positions in SHIB, ETH, USDT, MATIC, etc. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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