ETF effect: How inflows into digital assets crossed $1B last week



  • The AuM surged to a two-year high of $59 billion.
  • The potential sale of Genesis Global’s holdings could be a major bearish catalyst.

Digital asset funds recorded net inflows for the second consecutive week, as per the latest report by digital asset management firm CoinShares.

Crypto market rebounds and how!

Investments totaling over a billion were made into the cryptocurrency market last week, an increase of 55% from the week before.

Source: CoinShares

With the latest figures, the total inflows since the beginning of 2024 reached $2.7 billion. Moreover, the total assets under management (AuM) surged to a two-year high of $59 billion.

Note that AuM is considered as an important performance gradient of a fund. A higher AuM tends to attract further investments.

Spot ETFs drive the surge

Funds tied to Bitcoin [BTC] attracted nearly 98% of the total outflows last week, taking year-to-date (YTD) inflows to $2.5 billion.

Much of the action revolved around the dozen odd Bitcoin spot ETFs in the U.S. that were granted regulatory approval last month.

Newly issued ETFs have received $2.8 billion in inflows since the launch. On the other hand, outflows from the Grayscale Bitcoin Trust (GBTC), which transitioned into a spot ETF, were on the decline.

This was supported by data gathered by AMBCrypto from SoSo Value. As evident, daily outflows from the fund have dropped 92% from the peak on the 22nd of January.

Grayscale outflows slowing down

Source: SoSo Value

While this was a welcome development, the report cautioned about the potential liquidation of $1.6 billion of bankrupt crypto lender Genesis Global’s holdings. Such an event could apply significant downward pressure on the market.

Other crypto products see demand as well

Meanwhile, funds linked to other major cryptos like Ethereum [ETH] and Cardano [ADA] also experienced considerable inflows, at $16 million and $6 million respectively.

The spike in investments followed impressive price appreciation for the coins, both of which recorded gains of 6.8% in the last seven days, according to CoinMarketCap.

 

Next: Will Cardano’s surging activity be enough for ADA?



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