Recent data indicates that inflows have continued for the ninth consecutive day, even in the face of challenging macroeconomic conditions.
According to reported figures, digital asset investment products saw $226 million in inflows last week, marking the ninth straight trading day of positive net flows for exchange-traded products (ETPs).
The analysis, led by the Head of Research, reveals a cautious rebounding of institutional involvement after previously experiencing significant outflows earlier in the month.
Notably, Bitcoin drove the majority of the inflows, drawing in $195 million. Conversely, short Bitcoin products witnessed $2.5 million in outflows, continuing a four-week trend of diminishing bearish sentiment.
This turnaround follows a broader market adjustment that had seen total assets under management across global Bitcoin ETPs decrease to $114 billion, the lowest level since shortly after the U.S. elections.
For the first time in five weeks, altcoin ETPs reported net inflows of $33 million. This shift suggests a slight increase in investor interest beyond Bitcoin following four weeks of altcoin outflows amounting to $1.7 billion.
Ethereum led the altcoin inflows, bringing in $14.5 million, followed by Solana with $7.8 million. Additionally, XRP and Sui attracted $4.8 million and $4 million, respectively. These figures imply that while Bitcoin remains a primary focus for institutional investment, certain layer-1 and payment-centric protocols are starting to gain traction as macroeconomic uncertainties affect broader risk appetites.
Geographic participation centers around the U.S. and Europe
Inflows were predominantly seen in major Western markets, with the United States recording $204 million in net inflows, followed by Switzerland with $14.7 million and Germany at $9.2 million. Small outflows were observed in Hong Kong ($2.1 million) and Brazil ($1.3 million), reflecting a degree of geographic divergence in sentiment, though overall regional participation remained positive.
This weekly inflow trend experienced a temporary setback on Friday, with ETPs facing $74 million in net outflows. This was linked to the release of U.S. core personal consumption expenditure (PCE) data that surpassed expectations, possibly reinforcing the Federal Reserve’s hawkish outlook.
While recent economic signals suggest a slowdown in growth, the heightened inflation figures complicate the Fed’s approach, introducing short-term volatility into digital asset flows.
Institutional capital remains sensitive to macroeconomic changes
Despite the week’s positive inflows, the overall investor sentiment remains cautious, reflecting the intricate macroeconomic landscape. Sustained inflows indicate some conviction in re-entering the market; however, the responsiveness to inflation data underscores the lasting impact of central bank policies on crypto investment strategies.
The analysis emphasizes the significance of cross-asset correlations and macroeconomic factors in influencing institutional behavior. The reported decline in Bitcoin’s assets under management aligns with a broader re-evaluation of growth projections and ongoing inflation concerns, both crucial elements in the framework of digital asset risk exposures.
Current trends indicate that investors are selectively re-engaging with digital asset markets, showing a preference for Bitcoin and large-cap altcoins. Additionally, they are maintaining defensive strategies in light of potential fluctuations in interest rates.
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