Digital asset investment products experienced a positive turnaround in sentiment as inflows reached $862 million last week, almost fully recovering from record outflows of $931 million in the prior week. Bitcoin products attracted the majority of the inflows, drawing around $865 million. The increase is attributed to renewed interest from new ETF issuers in the United States, contributing $1.8 billion in total. Grayscale experienced outflows of $967 million during the same period, while short-Bitcoin products faced outflows for the second consecutive week, totaling $2 million.
Despite the positive inflows, activity in exchange-traded funds (ETFs) has started to slow down, with daily trading turnover now at $5.4 billion, a decline of 36% compared to its peak three weeks ago. This decrease in turnover remains significantly higher than the 2023 average of $347 million, indicating that the initial market hype is gradually cooling off. On a regional level, the United States witnessed additional $897 million in inflows, while Europe and Canada combined experienced outflows of $49 million, bringing their year-to-date outflows to $785 million. Ethereum, the second-largest cryptocurrency, saw outflows of $19 million for the fourth consecutive week, often reflecting investor caution after network upgrades.
In the altcoin market, there were inflows of $18.3 million last week, with Solana emerging as the top performer attracting $6.1 million in inflows. Other notable inflows were seen in Filecoin, Polkadot, and Chainlink, receiving $3.9 million, $2.4 million, and $1.9 million respectively. Spot Bitcoin ETFs saw net outflows on Monday as withdrawals from Grayscale’s Bitcoin ETF (GBTC) surged, reaching over $300 million. The combined net outflow for Bitcoin spot ETFs reached $85.84 million, primarily driven by the significant outflow from GBTC. BlackRock’s ETF IBIT saw a net inflow of $165 million, while Fidelity’s ETF FBTC recorded a net inflow of $43.99 million. Overall, Bitcoin spot ETFs have attracted a cumulative net inflow of $12.04 billion.
The negative flows in Bitcoin ETFs coincide with a correction in the price of Bitcoin, which dropped 5% to as low as $66,000. Currently trading at $66,858, Bitcoin has experienced a more than 4% drop over the past day. This correction comes just weeks before the upcoming Bitcoin halving event, expected to occur in 19 days. Despite this correction, digital asset investment products have seen significant positive inflows, with Bitcoin products leading the way. The slowdown in ETF activity indicates a cooling off of the initial market hype, while regional variations in investor sentiment continue to persist. Altcoins like Solana, Filecoin, Polkadot, and Chainlink have also seen notable inflows, indicating continued interest and investment in the digital asset market.
