Despite the looming threat of an energy crisis and geopolitical tensions, the crypto market has demonstrated remarkable resilience, with investment products recording significant inflows last week. According to CoinShares, crypto exchange-traded products (ETPs) saw $619 million in inflows, with Bitcoin (BTC) leading the charge with $521 million in new investments.
Two Weeks of Positive Momentum
This marks the second consecutive week of gains, following a $1 billion influx the previous week. The positive trend comes after a five-week sell-off that saw roughly $4 billion in outflows. However, sentiment weakened toward the end of the week, with $829 million in outflows on Thursday and Friday.
Bitcoin ETPs Turn Positive Year-to-Date
The latest inflows have turned Bitcoin ETPs positive year-to-date, with $117 million in inflows. This is a significant turnaround from the previous week, when Bitcoin ETPs recorded $408 million in outflows. Ether (ETH) also saw a strong performance, with about $86 million in inflows, while Solana (SOL) recorded roughly $15 million in inflows.
XRP Experiences Outflows
Notably, XRP was the only asset to see meaningful outflows, with more than $30 million leaving the market. Despite these outflows, XRP remains in the green year-to-date, with $123 million in inflows. Ether, however, is still underwater with $340 million in outflows, while Solana has recorded $170 million in inflows year-to-date.
Geopolitical Uncertainty Continues
The Crypto Fear & Greed Index dropped to a score of eight on Monday, signaling “extreme fear,” amid ongoing geopolitical uncertainty tied to the conflict in Iran. James Butterfill, CoinShares’ head of research, noted that the rise in oil prices has offset any potential decline in inflation that might have resulted from weak payroll data. He added that the overall data points to “broadly positive sentiment toward the asset class during a period of geopolitical stress.”
Macro Environment Remains Challenging
CoinShares expects near-term consolidation with a modest downside bias, as the macro environment “is not straightforwardly supportive,” and further geopolitical uncertainty “cuts both ways for risk appetite.” This view aligns with CryptoQuant’s assessment that the current geopolitical environment is unfavorable for Bitcoin, given the asset’s volatility.
Despite the challenges, the crypto market’s ability to attract significant inflows during periods of uncertainty highlights its growing appeal as a safe-haven asset. As geopolitical tensions and economic uncertainties persist, the resilience of the crypto market will be closely watched by investors and analysts alike.
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