Crypto Inflows Surge in 2024 Despite ETF Delay
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In a robust kick-off to the new year, the market saw $151 million in crypto inflows go into digital asset investment products during the first week of 2024, according to the latest Digital Asset Fund Flows Weekly Report by CoinShares.
Since the Grayscale vs. SEC lawsuit delayed the launch of the spot-based ETF in the US, total inflows have reached an impressive $2.3 billion, constituting 4.4% of the crypto fund industry’s total assets under management (AuM).
A noteworthy trend is the confidence exhibited by investors in the face of regulatory uncertainties in the US. The US market accounted for 55% of the total inflows, with Germany and Switzerland following at 21% and 17%, respectively.
Bitcoin Claims the Lion’s Share of Crypto Inflows
Bitcoin, the leading cryptocurrency, dominated inflows, attracting $113 million in the first week. This represents a 3.2% increase in Bitcoin’s AuM over the past nine weeks. Interestingly, short-bitcoin products, signaling a bet against Bitcoin’s price, experienced outflows of $1 million in the first week of 2024, contrary to expectations following the ETF launch delay.
Ethereum, the second-largest cryptocurrency, marked a shift in sentiment with positive inflows of $29 million, overcoming previous outflows attributed to network congestion and high fees. Ethereum’s total inflows over the last nine weeks reached $215 million.
However, Solana, a competitor to Ethereum, faced challenges, witnessing outflows of $5.3 million in the first week of 2024. On a brighter note, other cryptocurrencies such as Cardano, Avalanche, and Litecoin attracted inflows of $3.7 million, $2 million, and $1.4 million, respectively.
Blockchain equities, representing stocks of companies engaged in the crypto industry, experienced substantial inflows of $24 million during the same period. This underlines investors’ keen interest in the broader crypto ecosystem and the innovations facilitated by crypto assets.
Despite the setback in the launch of the US ETF, the crypto fund industry is off to a robust start in 2024. Investors are demonstrating optimism and diversifying their portfolios with various crypto assets, emphasizing their belief in the sector’s long-term potential.
