Digital Asset Funds Record Highest Weekly Inflows Since Last July – Report
The crypto market correction for most of 2022 was not enough to limit inflows into the industry, as the digital asset market saw a further uptrend at the start of this year. Investments in digital assets products see their first peak inflows in a week this year after experiencing $408 million in net outflows over the past six weeks.
A $160 Million Inflow For Digital Assets
According to on-chain data, the digital asset market saw $160 million in inflows over the last seven days. The latest development is the largest for digital assets since last July and marks a significant turnaround for digital asset investment products.
Moreover, this comes after a month and a half of outflows amounting to $409 million from the space. Meanwhile, the positive sentiments towards digital asset products mirror the recent experiences in the broader crypto industry.
However, investors believe this is unlikely, especially as the crisis in the traditional financial (TradFi) sector triggered by the collapse of the crypto-friendly bank, Silicon Valley Bank (SVB), is yet to be fully addressed.
The SVB fallout is considered the most impactful banking debacle since the 2008 global financial crisis and has caused significant damage to the sector. Fortunately, the banking system got some relief on Monday, March 27, following the announcement that First Citizens Bank has agreed to purchase the deposits and loans of the now-insolvent SVB.
As part of the terms of the agreement, First Citizens Bank and Trust Company will assume ownership of SVB’s assets worth $110 billion. In addition, the two firms will also acquire deposits worth $56 billion and loans of $72 billion.
Following the announcement, banks’ stocks spiked sharply during the premarket period.
Short Bitcoin Products Draw $31 Million Inflows
Furthermore, the Coinshares weekly report indicates that Bitcoin-based funds saw the most inflows last week at nearly $128 million. On the other hand, Short BTC products also saw $31 million in inflows, indicating that most investors are skeptical about injecting funds into digital assets.
However, short Bitcoin-based products remain the investment fund with the most inflows in 2023. Aside from Bitcoin, Ethereum-based funds recorded outflows of $ 5.2 billion last week, its third week of consecutive outflows.
Per Coinshares, investors express their worries over the upcoming Shanghai upgrade, which they believe is one of the reasons for the poor performance of Ethereum-based funds. From a regional perspective, digital asset fund investments have increased in several countries, which signals a major improvement for this class of digital tokens.
For emphasis, the United States saw the highest inflows with $69 million, followed by Germany with $58 million and Canada with $26 million. Despite the broader crypto market troubles, analysts believe that the recent spikes in investment inflows prove that digital asset investment funds are beginning to reverse their previous periods of downtrends.
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