Investors in digital asset investment products showed hesitancy in the past week, leading to minor outflows of $126 million due to stalled positive price momentum. Although trading volumes increased slightly from $17 billion to $21 billion on a week-on-week basis, activity in exchange-traded products (ETPs) and exchange-traded funds (ETFs) dropped relative to the overall market, accounting for only 31% of total volumes last week. Bitcoin experienced outflows of $110 million but maintained positive inflows of $555 million month-to-date. Ethereum saw the most significant outflows of $29 million last week, marking its fifth consecutive week of outflows. However, several lesser-known altcoins attracted inflows, including Decentraland, Basic Attention Token, and LIDO.
Regionally, sentiment varied, with the United States recording the largest outflows of $145 million, followed by Switzerland and Canada with $5.7 million and $6 million in outflows, respectively. In contrast, investors in Germany viewed recent price weakness as an opportunity, injecting $29 million in inflows last week. The cautious sentiment among investors reflected their wariness of current market conditions and the uncertain trajectory of digital assets. Despite this caution, investors poured a total of $646 million into crypto products last week, pushing year-to-date inflows to an unprecedented $13.8 billion, surpassing the previous year’s total of $10.6 billion. Bitcoin attracted the most attention from investors, with inflows totaling $663 million.
Bitcoin experienced a 2.8% surge over a 24-hour period, reaching a trading value above $66,500, while Ethereum advanced to $3,240 after multiple issuers in Hong Kong received approval for spot crypto ETFs. China Asset Management, Bosera Capital, and other applicants announced their approval to list spot Bitcoin and Ether ETFs in Hong Kong. Analysts predict mainland Chinese investors could invest $25 billion in potential Hong Kong-listed spot Bitcoin ETFs through the Southbound Stock Connect program. This program allows qualified mainland Chinese investors to access eligible shares listed in Hong Kong. Additionally, there is speculation about a potential outflow of Bitcoin from miners following an upcoming halving event, with estimates suggesting miners could liquidate around $5 billion worth of BTC over four to six months, leading to potential sideways movement in Bitcoin’s price.
Overall, the digital asset market experienced minor outflows in the past week as investors displayed caution due to stalled positive price momentum. While Bitcoin maintained positive inflows, Ethereum saw continued outflows. Altcoins such as Decentraland, Basic Attention Token, and LIDO attracted inflows despite the overall cautious sentiment. Regionally, investor sentiment varied, with the United States recording the largest outflows and Germany seeing inflows. Despite investor hesitation, overall inflows into crypto products continued to rise, surpassing the previous year’s total. The approval of spot crypto ETFs in Hong Kong could potentially attract significant investments from mainland Chinese investors. Additionally, there is speculation about potential outflows of Bitcoin from miners following an upcoming halving event, potentially influencing Bitcoin’s price trajectory in the coming months.
