Key Points:
Investments in crypto products amounted to $3.3 billion in inflows over the past week, elevating the total for 2024 to an unprecedented $10.8 billion.
Fears regarding the U.S. economic outlook and increasing treasury yields appear to be driving investors toward diversification into digital assets.
Bitcoin dominated the inflow chart with $2.9 billion, while XRP experienced its most significant outflows to date, totaling $37.2 million.
Last week witnessed a notable surge in institutional interest in crypto investment products, with digital asset funds attracting $3.3 billion in inflows, as reported by CoinShares.
This influx has set a remarkable year-to-date total of $10.8 billion, indicating a resurgence of confidence in the cryptocurrency market.
James Butterfill, head of research at CoinShares, highlighted that total assets under management in crypto exchange-traded products (ETPs) briefly reached an all-time high of $187.5 billion.
Concerns Spark Digital Asset Interest
This increase coincides with growing unease surrounding the U.S. economy, particularly following a Moody’s downgrade and the rise in treasury yields, which have led investors to explore diversification strategies.
Butterfill remarked, “We believe that growing concerns over the US economy, driven by the Moody’s downgrade and the resulting spike in treasury yields, have prompted investors to seek diversification through digital assets.”
The U.S. remained at the forefront of these inflows, contributing $3.2 billion, while Germany, Hong Kong, and Australia added $41.5 million, $33.3 million, and $10.9 million, respectively.
Conversely, Switzerland saw $16.6 million in outflows as traders took profits from recent price appreciation.
Bitcoin led the charge, attracting $2.9 billion, which accounts for nearly one-fourth of the total inflows for the year 2024.
Additionally, there was a rise in short-Bitcoin products, which brought in $12.7 million—the highest amount since December—indicating some market participants are betting against the recent price uptick.
Ethereum also maintained its upward trend with $326 million in inflows, marking its fifth consecutive week of gains and the strongest performance in nearly four months.
In stark contrast, XRP’s remarkable 80-week inflow streak came to an end with $37.2 million in recorded outflows.
Bitcoin’s Price Movement Linked to Trade Negotiations
Bitcoin experienced a brief surge past $111,000 before retreating to approximately $109,600 late Sunday, following President Donald Trump’s decision to postpone a proposed 50% tariff on European goods.
This announcement came after a conversation with EU Commission President Ursula von der Leyen, allowing for additional time for trade discussions and alleviating global market tensions.
Modest gains were observed in U.S. stock futures, hinting at a sense of cautious optimism, although volatility remains prevalent, especially with a looming deadline of July 9 keeping investors apprehensive.
The prior threat of substantial tariffs had caused Bitcoin to drop nearly 2%, reflecting the crypto market’s increasing sensitivity to geopolitical and macroeconomic factors.
Analysts highlight that ongoing institutional inflows, supportive regulatory frameworks, and influential monetary trends are forming a strong structural foundation for the crypto market, despite the short-term fluctuations caused by political events.
Shunyet Jan, Head of Derivatives at Bybit, has suggested that if current conditions continue, Bitcoin could reach $125,000 by the close of the second quarter.
Meanwhile, crypto analyst Scott Melker predicts Bitcoin could rise to $250,000 by the end of 2025, propelled by institutional interest and a more developed market framework.
Adam Back, a key figure within the Bitcoin community and CEO of Blockstream, asserts that Bitcoin is significantly undervalued and could surge to between $500,000 and $1 million per coin during the current market cycle.
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