Emily Walker
The global cryptocurrency industry is experiencing a surge in interest from investors, with significant capital flowing into crypto investment products last week.
Recent findings from CoinShares’ weekly report indicate that crypto funds had a notable net inflow of $2.19 billion worldwide, pushing the total for the year to an impressive $33.5 billion.
This increase aligns with Bitcoin’s ascent to a record price of $93,477, which helped elevate CoinShares’ total assets under management for crypto funds to around $138 billion.
Distribution of Crypto Fund Inflows and Major Trends
The inflow was predominantly driven by US-based funds, which attracted $2.21 billion of the total. Contributions from other areas included $27 million from Hong Kong, $18 million from Australia, and $13 million from Canada.
Conversely, Swedish and German investors chose to take profits, resulting in outflows of $58 million and $6.8 million from these regions, respectively. Bitcoin-focused products remained at the forefront, drawing in $1.48 billion in net inflows globally during the week.
The renewed enthusiasm for Bitcoin was fueled by its price increase but also coincided with a rise in short-Bitcoin investments, which garnered $49 million. This trend suggests a cautious approach from some investors who may be preparing for potential price corrections after the recent highs.
Ethereum products, which faced difficulties recently, are showing signs of recovery, achieving net inflows of $646 million globally.
James Butterfill, CoinShares’ Head of Research, pointed out that various market factors, including a proposed upgrade known as the Beam Chain by an Ethereum researcher and bullish sentiment due to the US elections, may have contributed to this shift. Ethereum inflows represented 5% of the asset’s AUM, highlighting renewed confidence among investors.
Factors Contributing to the Growth
Similar to Ethereum’s inflow trends, Butterfill noted that the uplifting crypto fund inflows last week seemed influenced by a convergence of market dynamics, including changes in US monetary policy and gains made by the Republican party in the US elections.
He also mentioned that while the week began with a robust $3 billion in net inflows in the first few days, there was a subsequent withdrawal of $866 million following Bitcoin’s peak achievement.
Speaking of Bitcoin’s peak, after reaching above $93,000 on November 13, it has faced a correction in its price.
Currently, Bitcoin has decreased by 2.8% from its peak of $93,477, trading at $90,334, although it has seen a slight increase of 0.2% over the past day.
Furthermore, in the few days following this price correction, Bitcoin’s daily trading volume has considerably reduced from over $70 billion last week to about $59 billion today.
Featured image created with DALL-E, Chart from TradingView