Crypto investment product net inflows see $130m rebound

Weekly digital asset investment products broke a five-week outflow streak as crypto traders in the U.S. and Hong Kong deployed more capital than withdrawals. 

According to CoinShares, $130 million flowed into these crypto vehicles, with the U.S. comprising the lion’s share last week. Dwindling Grayscale outflows cushioned activity in the region as GBTC marked its lowest weekly withdrawals in five months at $171 million. 

Hong Kong Bitcoin (BTC) ETFs amassed $19 million in inflows but paled compared to Wall Street offerings, which raked $135 million across some 11 products. Analysts noted that $8 billion in ETF volume indicated a downtrend since last month saw a $17 billion weekly average.

“These volumes highlight ETP investors are participating less in the crypto ecosystem at present, representing 22% of total volumes on global trusted exchanges relative to 31% last month.”

Although market prices retraced, Bitcoin sentiment translated into inflows. The same could not be said concerning crypto’s second-largest asset class, Ethereum (ETH), as researchers noted more outflows of $14 million. 

CoinShares’ analyst James Butterfill wrote that ETH outflows were likely connected to the U.S. regulatory activity around spot Ethereum ETFs. Since the SEC delayed decisions on the matter, skepticism that approvals will eventually arrive has increased. 

Enforcement action against Ethereum-adjacent entities like Consensys, Uniswap and crypto operators like Robinhood further solidified this notion. 

Also, Bitcoin maxi Michael Saylor told audiences that Ethereum and other altcoins are unregistered crypto asset securities, a rhetoric the SEC has long suggested either by lawsuits or refusal to classify ETH as a commodity or a security.

While the SEC’s stance remains largely unclear, experts believe this trend may change due to Congress bills and proposals that may clarify what agency can supervise the crypto industry.