Digital Asset Investment Inflows Surge

Digital asset investment products experienced a resurgence in investor interest last week, as inflows reached an impressive total of US$136 million. This brought the cumulative inflows for the past three consecutive weeks to a substantial US$470 million, effectively reversing the trend of outflows observed over the previous nine weeks. Year-to-date, digital asset investment products now boast a net positive inflow of US$231 million.

Digital asset investment products saw US$136m of inflows last week bringing the last 3 consecutive weeks inflows to US$470m, fully correcting the prior 9 weeks of outflows. Bitcoin remains the focus amongst investors, with inflows totalling US$133m last week, while short-bitcoin…

— Wu Blockchain (@WuBlockchain) July 10, 2023

Bitcoin Dominates Investor Focus

Despite the positive flow of funds, trading turnover has slowed, with investment products amounting to US$1 billion for the week, compared to an average of US$2.5 billion recorded in the preceding two weeks. Analysts attribute this decline in trading volumes to the seasonal effect typically observed during July and August when lower activity levels are commonplace.

Unsurprisingly, Bitcoin remains the primary focus among investors, as inflows into the popular cryptocurrency reached US$133 million last week. In contrast, short positions in Bitcoin experienced outflows totaling US$1.8 million, marking the 11th consecutive week of negative sentiment towards these positions. The persistent preference for Bitcoin over alternative coins is evident in the market.

Ethereum, the second-largest cryptocurrency by market capitalization, received inflows of US$2.9 million last week. However, the positive investor sentiment only marginally benefited Ethereum, as the inflows for the past three weeks represented a mere 0.2% of the total assets under management (AuM). In comparison, Bitcoin accounted for 1.9% of the AuM. Year-to-date, Ethereum still faces a negative net flow position of US$63 million, despite minor outflows from short positions last week amounting to US$0.3 million.

Several altcoins witnessed inflows during the week, including Solana, XRP, Polygon, Litecoin, and Aave. On the other hand, both Cosmos and Cardano experienced minor outflows, signalling a relatively lower level of investor confidence in these particular altcoins.

Furthermore, blockchain equities recorded their highest inflows in a year, reaching a significant sum of US$15 million, reflecting growing investor interest in companies operating within the blockchain industry.

While digital asset investment products continue to attract funds, trading volumes have tapered off, likely due to the seasonal factors impacting market activity. Bitcoin’s dominance remains unchallenged, with Ethereum struggling to fully capitalize on improved investor sentiment. The altcoin market has shown mixed results, with inflows into select coins and minor outflows from others. As blockchain equities surge, the broader digital asset market appears to be adapting to evolving investor preferences and market dynamics.