The digital asset market recently experienced a significant rebound, with investment products attracting $176 million in inflows as investors took advantage of recent price dips. This influx follows a period of market correction that resulted in a decrease in total Assets under Management (AuM) to $75 billion, down from over $20 billion. However, a subsequent recovery has pushed the AuM back up to $85 billion. Trading activity in Exchange-Traded Products (ETPs) also surged during this period, with $19 billion in transactions recorded, well above the year-to-date weekly average of $14 billion, indicating heightened investor interest and activity.
According to a report from CoinShares, every region saw inflows last week, with the United States leading the charge with $89 million, followed by Switzerland, Brazil, and Canada. Ethereum emerged as the primary beneficiary of the market’s rebound, attracting $155 million in inflows, bringing its year-to-date inflows to $862 million, the highest level since 2021. This strong performance is largely attributed to the recent launch of U.S. spot-based ETFs, which have boosted investor confidence in Ethereum. On the other hand, Bitcoin had a mixed week, starting with outflows but ultimately recording $13 million in inflows. Short Bitcoin ETPs saw substantial outflows, with $16 million being withdrawn.
Bitcoin ended the week at around $58,700, marking a modest 0.9% increase from the previous week’s close. The cryptocurrency experienced significant volatility, dipping as low as $49,000 before stabilizing above $50,000. This price action reflects the ongoing uncertainty in the digital assets market, driven by geopolitical tensions and economic unpredictability. Ethereum’s spot ETFs recorded $105 million in inflows despite challenges in the broader market, with total flows since inception being negative at $405 million in outflows. However, the outlook for Ethereum spot ETFs is increasingly optimistic, with nearly $1.9 billion in net inflows offsetting previous outflows.
Matteo Greco, a research analyst at digital asset investment firm Fineqia International, noted a reduction in leverage in Bitcoin, with total open interest dropping by about 12% since the end of July. This reduction in leverage is viewed positively by markets as it reduces the risk of over-leveraging, which could lead to more severe market corrections. Overall, the digital asset market is showing signs of recovery and resilience, with investors viewing recent price weaknesses as buying opportunities. The surge in trading activity in ETPs and the positive sentiment towards digital assets highlight the growing interest and confidence in cryptocurrencies despite the market’s volatility and uncertainties.
