Ethereum, Solana Remain Institutional Investors Favorites As Inflows Continue

Ethereum and Solana registered net inflows last week despite a price correction among most cryptocurrencies. According to the most recent Digital Asset Fund Flows Weekly Report published by CoinShares, the cumulative inflows into these investment products reached an impressive $176 million over the week. This positive trend was consistent across all regions, with each registering positive inflows, signifying widespread interest from investors globally. 

Surprisingly and deviating from the Bitcoin dominance trend, Ethereum-based investment products attracted the most inflows during the week.

Institutional Investors Focus On Ethereum And Solana

Despite the fluctuations in market value, investor interest in digital assets remained strong, reflecting institutional investors’ continued confidence in the long-term potential of cryptocurrencies. According to CoinShares, the extended crypto market correction had pushed the total Assets under Management (AuM) of investment products from $95 billion to $75 billion. However, investment products have recovered a bit due to consistent inflows, which have helped push the AuM back up to $85 billion.

Interestingly, last week’s activity was higher than usual. Trading volume in exchange-traded products (ETPs) reached $19 billion last week, which is higher than the $14 billion weekly average this year so far. What was particularly noteworthy about this trend was the shift in investor preference, as Ethereum-based investment products emerged as the primary beneficiaries of these inflows. This marks a deviation from the traditional dominance of Bitcoin in the market, where Bitcoin-related products typically attract the majority of investment. 

Notably, Ethereum-based investment products attracted $155 million worth of inflows last week, representing 88% of the total inflows. As such, the year-to-date inflows in Ethereum ETPs ballooned to a multi-year peak of $862 million, which is its highest since the 2021 bull market.

Bitcoin, on the other hand, managed to attract only $13 million worth of inflows. Multi-asset investment products came in second with $18.3 million worth of inflows. Solana-based products also managed to attract $4.5 million in inflows despite the cryptocurrency falling below $115 early last week.

The spirit of bullishness was also reflected in Short-Bitcoin products. The data revealed that Short-Bitcoin ETPs registered their largest outflow since May 2023, with a total of $16 million being withdrawn from these products. This outflow represents 23% of the total assets under management for Short-Bitcoin ETPs. 

In terms of geographical location, every region witnessed inflows last week. The US came in top with $89 million in inflows. Interestingly, the US is the only region still with a negative month-to-date flow. Switzerland, Brazil, and Canada had inflows of $21.3 million, $19.9 million, and $19.2 million, respectively. 

What Next?

This shift away from bearish strategies, reflected in the outflows from Short-Bitcoin ETPs, aligns with the broader trend of renewed confidence in digital assets. The market now looks like it is finally recovering from corrections. Most of the large-market-cap cryptocurrencies have begun to post gains in the past 24 hours. 

Featured image created with Dall.E, chart from Tradingview.com