According to the latest weekly report from CoinShares Research, capital inflows into crypto investment products totaled $598 million last week. This marks the fourth consecutive week of net inflows, bringing total year-to-date inflows to more than $5.7 billion.
Crypto, sustained entries despite volatility
The crypto market remains volatile in 2024, and the price of Bitcoin frequently changes by plus or minus 10% in a few days. However, institutional investors do not seem frightened by these fluctuations, and continue to allocate significant funds in this sector.
This appetite for risk can be explained by the high return potential of crypto-assets over the long term. Even after the 2022-2023 bear market debacle, they are seen as a promising investment class for diversifying a portfolio.
The central role of the United States
Unsurprisingly, the United States remains the dominant market for crypto investment products.
The appetite of American investors for cryptos is confirmed, despite the setbacks of the giant Grayscale, which recorded millions of net outflows last week. Its flagship products, such as the Grayscale Bitcoin Trust, suffer from competition from new regulated investment vehicles.
But overall, the depth of the American institutional market and its historic appetite for technological innovation continue to make the United States the leader in crypto adoption.
Bitcoin dominates, ETH resists
Unsurprisingly, Bitcoin captures the bulk of crypto capital inflows, totaling $570 million last week. Its position as a leading crypto and its image as “digital gold” make it a preferred choice for institutional investors. The funds allocated to BTC since January already exceed the $5.6 billion.
Ethereum also maintains its status as investors’ second favorite crypto, with 17 million net inflows last week. The prospect of the “merger”, which will see the ETH blockchain move to a more efficient validation mechanism, strengthens its technological image.
In contrast, the Solana network suffered from technical bugs, resulting in net outflows of $3 million. These issues are a reminder that despite their potential, emerging blockchains remain risky bets for investors.
Figures from the CoinShares report show that institutional interest in crypto remains strong at the start of 2024, despite an unfavorable macroeconomic context. This confidence demonstrates the perceived long-term potential, and suggests continued adoption by traditional investors.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
