Crypto fund inflows improve as positive sentiment returns

  • Amid U.S. inflation data, digital asset investment products record inflows.
  • Bitcoin’s inflows represented 93% of all inflows registered. 

Digital asset investment products recorded inflows last week after three consecutive weeks of outflows, according to a new report by digital asset investment firm CoinShares.

Source: CoinShares

The report found that digital asset investment products saw inflows totaling $29 million last week, with Bitcoin [BTC] investment products accounting for most of the inflows at $27 million. This marked a reversal from the previous three weeks when digital asset investment products saw outflows totaling $135 million.

According to Coinshares, last week’s inflows might be due to the recent U.S. inflation data. For July 2023, this was 3.2%, slightly below what was expected. 

The digital asset investment firm found further that, regionally, most of “the activity was in Canada,” contributing a total inflow of $24 million in the week under review. 

This sudden growth in inflows from Canadian investors coincided with a period when Ethereum’s [ETH] Coinbase Premium Index (CPI) slipped into negative territory.

The CPI metric measures the difference between the price of an asset on Coinbase and its price on Binance. When an asset’s CPI is positive, there is strong buying pressure among institutional investors on Coinbase. Conversely, a negative CPI suggests less accumulation activity by institutional investors on the exchange. 

According to recent findings shared by CryptoQuant’s pseudonymous analyst ‘Greatest Trader,’ institutional investors in the U.S. have begun to shun the leading altcoin.

Bitcoin is king, still

In the previous week, BTC recorded its largest weekly outflows since March. Tides turned last week, as the king coin registered inflows that totaled $27 million. This represented 93% of all total inflows recorded. 

The report stated that this brought its year-to-date inflows to $456 million, with an asset under management (AuM) value of $24.43 billion. 

According to Coinshares:

“This data suggests that sentiment for Bitcoin and the broader crypto market remains supportive despite the seasonally low volumes.”

After 14 weeks of consecutive outflows, Short-Bitcoin products experienced no outflows the previous week, suggesting that short traders stayed their hands. However, outflows resumed last week and amounted to $2.7 million. This made it the only asset category to record outflows in the week under review. 

Source: CoinShares

Ethereum made many smile

According to the report, leading altcoin ETH saw inflows of $2.5 million last week. Other altcoins such as Uniswap [UNI] and Solana [SOL] benefited from the improved sentiment with respective inflows of $700,000 and $400,000.

Ripple’s XRP recorded its 16th week of inflows. According to the report:

“XRP saw US$0.5m inflows and is now on a 16-week run of inflows, representing 12% of assets under management (AuM). XRP’s AuM has risen 127% since the beginning of the year.”

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