Investors have pumped a staggering $862 million into crypto funds just last week, nearly erasing the previous week’s record outflow of $931 million despite market volatility. The influx of capital into crypto funds shows growing confidence among investors while trading activity slows.
Data compiled by crypto fund tracking firm Coinshares revealed that Exchange-Traded Fund (ETF) activity is slowing down, with daily trading turnover currently at $5.4 billion, which is currently down 36% relative to its peak three weeks ago.
Crypto Volatility
The surge in investment comes amid a backdrop of increased volatility in the crypto market.
Bitcoin (BTC), the largest and most recognized crypto asset, with a current market cap of $1.3T, according to CryptocurreciesToWach, has experienced an unstable ride over the past week. Likewise, other major crypto assets like Ethereum and Solana witnessed a significant price swing.
In the past week, BTC fluctuated within the $68,000 to $71,000 mark. However, recent developments have caused the leading digital asset to decline in value. At the time of writing, the leading crypto asset is trading at $66,500.
According to CoinShares analysts, bitcoin recovered toward $70,000, and assets under management increased from $88.2 billion to $97.9 billion.
After withdrawing $3.7 million a week earlier, clients pulled out $2 million from structures that allow opening shorts on the first crypto. For Ethereum (ETH) funds, the outflow decreased from $34.2 million to $18.9 million, a typical trend following network upgrades, which indicate investors’ apprehension about their success.
Investor’s Allocation
Investors allocated $6.1 million, $2.4 million, and $1 million into instruments based on Solana (SOL), Polkadot (DOT), and Cardano (ADA), respectively.
On a regional level, the divergence continues, with the United States witnessing an additional influx of $897 million, whereas Europe and Canada collectively saw outflows of $49 million.
Despite the market fluctuations, investors view price dips as favorable buying opportunities rather than reasons for concern.
Meanwhile, investors are advised to exercise caution and conduct thorough research before allocating capital to crypto assets, recognizing the risk associated with the crypto market.
