Research Summary

The report discusses the surge in digital asset investments, with inflows reaching a 10-week total of $1.76 billion, the highest since October 2021. The leading regions for these inflows were Canada, Germany, and the US, while Asia experienced net outflows. Bitcoin and Ethereum saw significant inflows, and blockchain equities marked their seventh consecutive week of inflows.

Key Takeaways

Record Inflows in Digital Asset Investments

  • Continued Growth: Digital asset investment products experienced inflows totaling $176 million last week, marking the 10th consecutive week of inflows totaling $1.76 billion. This is the largest run of inflows since October 2021, representing 4% of assets under management (AuM).
  • Total AuM Increase: The total AuM has risen by 107% this year, although it remains below the all-time high of $86.6 billion seen in 2021. Trading volumes in ETPs remain high at $2.6 billion for the week, accounting for 12% of total Bitcoin volumes.

Regional Differences in Inflows

  • Leading Regions: Canada, Germany, and the US led the inflows with $79 million, $57 million, and $54 million respectively. In contrast, Hong Kong experienced minor outflows totaling $15 million.
  • Asia’s Net Outflows: Despite the small total AuM and the low number of ETPs in the Asian region, it is one of the only regions to see net outflows year-to-date.

Bitcoin and Ethereum Inflows

  • Bitcoin’s Dominance: Bitcoin was the main beneficiary of the inflows, receiving $133 million. Additionally, short-bitcoin saw inflows of $3.6 million last week after a 3-week run of outflows.
  • Ethereum’s Positive Turn: Ethereum saw further inflows of $31 million last week, bringing the 5-week total to $134 million. For the first time this year, net flows for Ethereum are now positive at $10 million, following a long period of negative sentiment.

Blockchain Equities’ Consistent Inflows

  • Seventh Consecutive Week: Blockchain equities marked their seventh consecutive week of inflows, with last week’s inflow of $17.4 million being the largest since July 2022.

Actionable Insights

  • Monitor the Continued Growth: Stakeholders should keep an eye on the continued growth of digital asset investments, particularly the consistent inflows into Bitcoin, Ethereum, and blockchain equities.
  • Understand Regional Differences: It’s crucial to understand the regional differences in inflows and outflows. While Canada, Germany, and the US are leading in inflows, Asia is experiencing net outflows. This could indicate varying levels of market maturity and regulatory environments.
  • Assess Ethereum’s Positive Turn: The shift to positive net flows for Ethereum after a long period of negative sentiment could indicate a change in investor sentiment towards this cryptocurrency. This shift should be further analyzed for potential implications.

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