Crypto investment products maintained their inflow streak last week, but the momentum significantly slowed as the market grappled with the Federal Reserve’s hawkish pause and ongoing geopolitical tensions, according to CoinShares.
Despite the continued inflows, the total of $230 million for the week was a sharp decline from the previous week’s $1.06 billion, reflecting a shift in investor sentiment. The slowdown was largely attributed to the market’s interpretation of the US Federal Reserve’s (Fed) recent meeting, which saw $405 million in outflows following the Federal Open Market Committee (FOMC) meeting.
Bitcoin Dominates, Ether Reverses Gains
Bitcoin (BTC) funds led the way, accounting for nearly all of last week’s crypto ETP inflows with $219.2 million in gains. In contrast, Ether (ETH) funds experienced a reversal, with $27.5 million in outflows, ending a three-week inflow streak. This divergence highlights the growing preference for Bitcoin as a safe haven in uncertain economic times.
Solana (SOL) continued its impressive run, recording $17 million in inflows for the seventh straight week. This brings the total inflows to $136 million, making Solana one of the most popular ETP assets in recent months. Notable gains were also seen in Chainlink (LINK) and Hyperliquid (HYPE), with inflows of $4.6 million and $4.5 million, respectively.
US Spot Bitcoin ETFs Drive Gains
About half of the Bitcoin ETP inflows were driven by US spot Bitcoin ETFs, which recorded $95.2 million in inflows last week. This marked the fourth consecutive week of gains, totaling $2.2 billion. However, despite the strong performance, spot Bitcoin ETFs remain underwater year-to-date, with roughly $400 million in outflows.
The US spot Ether ETFs, on the other hand, failed to maintain their inflow streak after three weeks of gains, with last week’s outflows totaling around $60 million. Year-to-date, US spot Ether ETFs have seen $599 million in outflows, while broader ETPs are roughly $50 million underwater.
Market Outlook and Analyst Insights
The slowdown in crypto ETF inflows underscores the market’s sensitivity to macroeconomic factors, particularly the Fed’s monetary policy. CoinShares head of research James Butterfill emphasized that the intra-week data supports this interpretation, with strong inflows in the first two days of the week reversing sharply after the FOMC meeting.
Looking ahead, the crypto market’s performance will likely continue to be influenced by the Fed’s actions and broader economic conditions. Analysts suggest that while the current environment presents challenges, the long-term fundamentals of crypto assets remain strong, particularly for Bitcoin, which is increasingly being seen as a hedge against inflation and economic uncertainty.
The total assets under management in crypto ETPs currently stand at $138 billion, with Bitcoin ETPs leading the pack at $1.2 billion year-to-date. As the market navigates these headwinds, the resilience of Bitcoin and other leading crypto assets will be closely watched by investors and analysts alike.
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