Global Cryptocurrency Investment Products See Surge in Inflows Despite Market Volatility
Global Cryptocurrency Investment Products See Surge in Inflows Despite Market Volatility
Robust Inflows Amid Market Turbulence
Global cryptocurrency investment products recorded significant net inflows of $1.3 billion last week, nearly doubling from the previous week's $747.4 million. This surge occurred despite a market downturn triggered by President Trump's tariff announcements, which caused a sharp decline in cryptocurrency prices. The inflows bring the year-to-date total to $7.3 billion, according to CoinShares.
Market Volatility and Price Corrections
The cryptocurrency market experienced volatility following the tariff news, with Bitcoin dropping over 10% to around $91,500 on February 3. Ether and memecoins also faced significant corrections, with Ether plunging approximately 36% to around $2,100, and leading memecoins falling 40%. Despite these price drops, weekly trading volumes remained consistent at $20 billion.
Bitcoin Recovery and Ongoing Pressures
Bitcoin managed a recovery above the $100,000 level after reports that tariffs on Mexico and Canada would be suspended for a month. However, the market faced renewed pressure when China announced retaliatory tariffs on U.S. goods. Bitcoin-based funds attracted $407 million in net inflows last week, representing 7.1% of Bitcoin's current market capitalization. U.S. spot Bitcoin ETFs accounted for $203.8 million of these inflows.
Ether Outperforms Bitcoin
Ether funds saw even stronger inflows, with $793 million in net inflows, surpassing Bitcoin funds for the first time this year. This was driven by significant purchases during the price weakness. U.S. spot Ethereum ETFs contributed $420.2 million to these inflows.
Inflows in Other Cryptocurrencies
Other cryptocurrencies also saw inflows, with XRP-based funds adding $21 million and Solana funds bringing in $11 million. The U.S. led regional inflows with $1 billion, while Germany, Switzerland, and Canada saw $61 million, $54 million, and $37 million, respectively.
Conclusion
Despite market turbulence, cryptocurrency investment products continue to attract significant inflows, with Bitcoin and Ether leading the charge. The resilience of these assets underscores their growing appeal to investors despite ongoing volatility.
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