Crypto ETPs See Strong Inflows Amid Market Volatility
Last week, crypto exchange-traded products (ETPs) experienced their fourth consecutive week of inflows, totaling $527 million. This surge comes amidst significant market fluctuations influenced by broader economic concerns, according to CoinShares’ latest report.
Market Sentiment Shaped by AI Impact
James Butterfill, the head of research at CoinShares, highlighted the impact of DeepSeek, a Chinese artificial intelligence company, as a key factor driving market sentiment. DeepSeek’s R1 model outperformed OpenAI’s ChatGPT, causing a stir in the tech industry with concerns over its potential impact on major US tech firms like Nvidia.
- $530 million in outflows were recorded at the beginning of the week due to uncertainty surrounding DeepSeek’s success.
- The market rebounded later in the week, attracting over $1 billion in inflows.
Bitcoin Leads Inflows with US Dominance
The United States continued to dominate inflows, with $474 million coming in last week and $5 billion year-to-date (YTD). Europe followed with $78 million in weekly inflows, bringing its YTD total to $93 million. However, Canada faced $43 million in outflows, likely due to concerns over US trade tariffs.
- Bitcoin investment products remained a top choice for investors, supported by the success of spot Bitcoin ETFs.
- BlackRock’s IBIT led inflows with $918 million, while major issuers like Fidelity, Grayscale, and Bitwise saw significant outflows.
XRP Shows Strength, Ethereum Faces Challenges
XRP continued its strong performance, attracting $15 million in inflows last week and reaching $105 million in YTD inflows. Ripple’s latest quarterly report highlighted increased on-chain activity, trading volume, and institutional demand, driven by optimism surrounding regulatory developments post the US presidential election.
Ethereum, on the other hand, faced a challenging week with neutral net flows. Butterfill suggested that ETH’s exposure to the technology sector and broader economic concerns may have impacted its performance.
Blockchain Equities Attract Investor Interest
Blockchain equities have seen $160 million in YTD inflows as investors view recent price dips as buying opportunities amidst market volatility.