Crypto Exchange-Traded Products (ETPs), led by Bitcoin (BTC) funds, have broken their one-month negative streak after recording significant inflows over the last week, signaling renewed demand for the digital asset-based investment products amid broader market weakness and geopolitical tensions.
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Crypto Funds Break Out Of Multi-Week Bleeding
In its latest Digital Asset Fund Flows Weekly Report, CoinShares revealed that crypto investment products recorded around $1 billion in inflows during the last week, breaking out of the multi-billion-dollar outflow streak that began mid-January with no notable outflows.
Crypto-based funds saw cumulative outflows of $4 billion during the previous five weeks, driven by market weakness and overall negative sentiment.
Notably, the US market accounted for most of the negative net flows, while Bitcoin ETPs showed the weakest performance among major cryptocurrencies, recording over $3.80 billion in outflows since January 23.
Now, funds based on the flagship cryptocurrency showed the strongest performance, with over $881 million in inflows, according to CoinShares’ data. Although the $3.7 million in inflows into short Bitcoin investment products highlights that the opinion remains polarized, the report noted.
Ethereum investment products recorded their strongest week since mid-January, registering inflows totaling $117 million. Despite this, the two largest cryptocurrencies by market cap remain in a net outflow position Year-to-Date (YTD). Conversely, Solana funds saw $53.8 million in inflows last week and $156 million in inflows YTD.
In addition, the US accounted for most inflows, with $957 million, while Canada, Germany, and Switzerland saw continued inflows of $34.1 million, $31.7 million, and $28.4 million, respectively.
“From a macro standpoint, it is difficult to attribute the shift in sentiment to a single catalyst. However, prior price weakness, a break below key technical levels, and renewed accumulation by large Bitcoin holders appear to have contributed to the reversal,” explained James Butterfill, head of research at CoinShares.
“At a more anecdotal level, recent client discussions have been almost entirely focused on identifying entry points rather than reducing exposure to the asset class,” he continued.
Bitcoin ETF Investors Show Diamond Hands
Amid last week’s rebound, Nate Geraci, co-founder of the ETF Institute, highlighted US spot Bitcoin ETF investors, who have “largely displayed diamond hands” during the market correction and negative sentiment.
The ETF expert observed that Bitcoin funds’ cumulative $6.5 billion in outflows since the October 10 crash were a “drop in the bucket” compared to the $55 billion in cumulative total net inflows that the category has seen since its January 2024 debut.
As reported by NewsBTC, Geraci stressed that while these major drawdowns are “a walk in the park for long-time BTC investors,” newer ETF investors also appear unfazed by the recent market conditions and are “apparently buying the dip.”
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Similarly, Bloomberg Intelligence Senior ETF Analyst Eric Balchunas discusses the performance of spot Bitcoin ETFs over the past two years, affirming, “As an ETF watcher, you know just how absurd this strength amid a 50% drawdown.”
He stated that the funds’ overall performance is “the real story,” rather than the $6 billion that has come out during the latest market downturn, which he concluded was normal for most assets.
As of this writing, Bitcoin is trading at $65,582, a 2.2% decline on the daily timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
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