Crypto Exchange-Traded Products (ETPs), led by Bitcoin (BTC) funds, have broken their one-month negative streak after recording significant inflows over the last week, signaling renewed demand for the digital asset-based investment products amid broader market weakness and geopolitical tensions.
Crypto Funds Break Out Of Multi-Week BleedingCrypto-based funds saw cumulative outflows of $4 billion during the previous five weeks, driven by market weakness and overall negative sentiment.
Now, funds based on the flagship cryptocurrency showed the strongest performance, with over $881 million in inflows, according to CoinShares’ data. Although the $3.7 million in inflows into short Bitcoin investment products highlights that the opinion remains polarized, the report noted.
Ethereum investment products recorded their strongest week since mid-January, registering inflows totaling $117 million. Despite this, the two largest cryptocurrencies by market cap remain in a net outflow position Year-to-Date (YTD). Conversely, Solana funds saw $53.8 million in inflows last week and $156 million in inflows YTD.
“From a macro standpoint, it is difficult to attribute the shift in sentiment to a single catalyst. However, prior price weakness, a break below key technical levels, and renewed accumulation by large Bitcoin holders appear to have contributed to the reversal,” explained James Butterfill, head of research at CoinShares.
“At a more anecdotal level, recent client discussions have been almost entirely focused on identifying entry points rather than reducing exposure to the asset class,” he continued.
Bitcoin ETF Investors Show Diamond HandsAmid last week’s rebound, Nate Geraci, co-founder of the ETF Institute, highlighted US spot Bitcoin ETF investors, who have “largely displayed diamond hands” during the market correction and negative sentiment.
The ETF expert observed that Bitcoin funds’ cumulative $6.5 billion in outflows since the October 10 crash were a “drop in the bucket” compared to the $55 billion in cumulative total net inflows that the category has seen since its January 2024 debut.
Similarly, Bloomberg Intelligence Senior ETF Analyst Eric Balchunas discusses the performance of spot Bitcoin ETFs over the past two years, affirming, “As an ETF watcher, you know just how absurd this strength amid a 50% drawdown.”
As of this writing, Bitcoin is trading at $65,582, a 2.2% decline on the daily timeframe.
