Digital Asset Funds See Unprecedented Inflows

digital asset funds

The digital asset market has been experiencing a significant influx of investments, with the focus primarily on a potential Bitcoin (BTC) Exchange Traded Fund (ETF). The CoinShares Market Flow report reveals that the market has seen an inflow of $261 million, marking the sixth week of consistent gains.

This six-week surge totals to $767 million, surpassing the growth recorded in July and setting a new record for the year. This is the highest inflow since the bull run ended in December 2021. Despite the market collapses and macroeconomic factors that led to a low total of $736 million last year, the market is showing signs of recovery.

Bitcoin Dominates as Ethereum Changes the Game

Bitcoin continues to be the dominant asset, with an inflow of $229 million last week. The anticipation of a spot BTC ETF approval by the Securities and Exchange Commission (SEC) has likely contributed to this surge. Despite several rejections in the past, recent court victories suggest that an approval may be imminent.

In the altcoin sector, Ethereum (ETH), Chainlink (LINK), and Solana (SOL) have all recorded gains. Solana, in particular, has seen an inflow of $11 million, making it a favorite among institutional investors. Ethereum, despite its struggles, remains a promising asset due to its staking feature and high number of decentralized applications (dApps).

Geographical Distribution of Investments

Investors from the United States contributed the most, with an inflow of $157 million. Europe also performed well, with Germany and Switzerland contributing $63 million and $36 million respectively. Canada, despite its ongoing efforts to clarify rules on stablecoins and the wider market, recorded an inflow of $9 million.

The high inflow from the US is likely due to the anticipated approval of the spot ETF, which has increased investor confidence. However, the lack of rule clarity has previously deterred US investors due to the numerous lawsuits filed by regulators.