Crypto funds have experienced a resurgence, logging a second consecutive week of net inflows after a significant sell-off that saw $5.5 billion leave the market. This indicates a renewed, albeit cautious, optimism among investors following a period of uncertainty and market correction.
Digital asset investment products saw inflows increase for the second consecutive week, with a total of $716 million flowing into digital asset ETPs last week. This has pushed assets under management (AuM) to $180 billion, although still below the all-time high of $264 billion.
Bitcoin ETFs saw a notable rebound, regaining positive territory with healthy inflows. This resurgence in investor confidence follows a choppy period of outflows. Bitcoin ETFs closed a session with $54.79 million in inflows, signaling a return of investor confidence. Ark & 21Shares' ARKB led the way with $42.79 million in inflows, followed by Fidelity's FBTC with $27.29 million.
Ether ETFs, however, experienced further outflows, driven entirely by Blackrock's ETHA. Despite this, other altcoins are gaining traction. Solana and XRP maintained their momentum with steady inflows, indicating a broader shift in investor appetite across the crypto ETF landscape. Solana funds added $15.68 million as demand for alternative crypto exposure increased. XRP ETFs brought in $10.23 million, demonstrating steadily rising interest. XRP ETFs enjoyed another $10.23 million inflow, spreading across Canary's XRPC ($4.97 million), Bitwise's XRP ($2.27 million), Franklin's XRPZ ($2.20 million), and Grayscale's GXRP ($785.40K).
The United States led the inflows with $483 million, followed by Germany with $96.9 million, and Canada with $80.7 million. Bitcoin investment products saw the largest demand, with inflows of $352 million, bringing the year-to-date cumulative inflows to $27.1 billion. Short Bitcoin products, in contrast, experienced outflows of $18.7 million, the largest since March. XRP recorded net inflows of $245 million, exceeding the 2024 annual inflows of $608 million, with year-to-date cumulative inflows amounting to $3.1 billion. Chainlink products also saw substantial inflows of $52.8 million, marking the largest weekly inflow on record and representing 54% of the product's assets under management.
Analysts attribute the renewed inflows to several factors, including a decrease in Bitcoin's volatility and the increasing participation of institutional investors. Bitcoin’s long-term volatility has nearly halved since its peak in 2021, which analysts attribute to the arrival of institutional investors and the launch of regulated instruments. Since the approval of spot Bitcoin ETFs in January 2024, these funds have accumulated 1.36 million BTC, with assets under management amounting to $168 billion, approximately 6.9% of the coin's market supply.
Following cumulative outflows of $4.35 billion, a $70 million inflow acted as a sentiment stabilizer. Analysts suggest that continued weekly inflows above $100 million could potentially push Bitcoin towards the $100,000–$110,000 range.
Despite the overall positive trend, the digital asset space remains susceptible to fluctuations based on macroeconomic indicators. Small outflows occurred late in the week in response to some U.S. macro indicators, yet overall investor sentiment continues to improve.
