Bitcoin products lead crypto funds into $1.9B week of inflows, extends positive streak

Crypto funds attracted $1.9 billion in inflows last week, extending the positive streak to nine consecutive weeks.

As per data from CoinShares, this performance brings year-to-date inflows to a record $13.2 billion despite ongoing geopolitical concerns weighing on global risk assets during the period.

Bitcoin leads crypto inflows with $1.3 billion recovery

Bitcoin recorded $1.3 billion in inflows last week and has shown a strong recovery after experiencing two weeks of minor outflows. This substantial inflow helped drive the overall positive performance across digital asset investment products during the period.

Short-bitcoin products also saw small inflows of $3.7 million. However, the total assets under management for these products remain low at $96 million. Bitcoin inflows helped the cryptocurrency rebound from weekly lows of $102,800 to $107,000, despite initial market instability.

Ethereum maintained positive momentum with $583 million in inflows and recorded its largest weekly inflow since February. The performance included Ethereum’s strongest single-day inflow during that timeframe. This has brought its cumulative inflows during the recent run to $2 billion, which accounts for 14% of assets under management.

Altcoins also showed renewed investor interest during the week. Following a three-week stretch of outflows, XRP received $11.8 million in inflows, while Sui maintained its momentum with an additional $3.5 million in inflows. Multi-asset products lost $14 million, while Solana had moderate inflows of $1.8 million.

XRP attracted $11.8 million, and Sui continued its pace with $3.5 million in weekly inflows. Litecoin had a little outflow of $0.1 million, while Cardano received $0.4 million in inflows. The week’s inflows helped to lift the nine-week run total to $12.9 billion. As per the data, year-to-date flows reached the $13.2 billion level across all digital asset investment products.

United States dominates regional inflows

The United States led global cryptocurrency investment flows with $1.921 billion in inflows during the week and accounted for the majority of total digital asset investment activity.

Canada recorded $12.1 million in inflows, with month-to-date flows reaching $21.8 million and year-to-date totals of $157 million.

Germany attracted $39.2 million weekly inflows and has contributed to $88.3 million month-to-date and $908 million year-to-date flows.

Switzerland saw $20.7 million in weekly inflows and has brought month-to-date flows to $40.5 million.

Australia maintained positive momentum with $9.2 million in weekly inflows and $15.8 million month-to-date, reaching $123 million year-to-date.

Sweden recorded outflows of $16.7 million for the week, with month-to-date outflows totaling $24.5 million and year-to-date outflows of $782 million.

Regional variations showed mixed sentiment across different markets. Hong Kong faced outflows of $56.8 million during the week, with month-to-date outflows reaching $97.3 million and year-to-date outflows of $24 million.

Brazil also recorded outflows of $8.5 million weekly and $17.1 million month-to-date. However, it maintained positive year-to-date flows of $44 million.

Other regions combined contributed $128 million in weekly inflows, with month-to-date flows of $227 million and $1.076 billion year-to-date. Total global flows reached $1.917 billion for the week, $2.121 billion month-to-date, and $13.238 billion year-to-date across all regions and investment products.

Bitcoin’s resilience amid geopolitical tensions supports institutional narrative

Bitcoin remained resilient amid escalating tensions in the Middle East, shunning pure panic selling typical of geopolitical tensions. A QCP report indicated that, after initial market jitters over Iran-Israel headlines, Bitcoin rebounded from weekly lows of $102,800 to $107,000. The report further indicated the same bounces for leading large-cap tokens and US equity futures.

Institutional demand was behind Bitcoin’s stubborn price action amid the chaotic period. Firms like Strategy and Metaplanet kept buying on dips, while spot Bitcoin ETFs saw their seventh straight week of inflows. The cryptocurrency maintained its position above the crucial psychological level of $100,000 despite initial shock at geopolitical events.

Friday’s modest 3% loss was a far cry from April 2024, when Bitcoin fell more than 8% following similar Iran-Israel tensions. The continued comparison helped reinforce Bitcoin’s enhanced stability in the face of geopolitical tensions compared to previous cycles.

Volatility measures were subdued in the face of rising geopolitical risk. Implied volatility in the Bitcoin frontend was below 40, with the VIX at approximately 20, both all-time lows in the context of what is transpiring. US Treasuries and Asian government bonds experienced inflows, indicating that markets were not entirely in risk-off.

Possible risks are Iranian blockade of the Strait of Hormuz potentially inducing oil price shocks, or explicit US military action potentially significantly displacing global risk assets. But other commentators think that those risks are also likely to prove structurally bullish for Bitcoin.

QCP observed that Bitcoin’s recent price action is favorable to the narratives that Bitcoin adoption is enabled by macro dislocation, increasing sovereign debt, and geopolitical tension.

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