Key Points
- Crypto investment products saw a $441 million inflow in the first week of July despite market volatility.
- Bitcoin dominated the inflows, while Ethereum experienced net outflows year-to-date.
The first week of July witnessed a significant influx of $441 million into crypto asset investment products. This occurred despite the recent market volatility caused by the Mt. Gox issue and selling pressure from the German government.
A weekly market report by CoinShares indicated that Bitcoin (BTC), the largest crypto asset by market capitalization, received the majority of the inflows, with $398 million invested into BTC investment products in the initial week of July.
Investments in Various Digital Assets
Although Bitcoin accounted for up to 90% of the total investments, other digital assets also saw considerable investments. Ethereum (ETH) and various altcoins experienced positive inflows, but they were eclipsed by Bitcoin’s significant numbers.
Investors invested around $16 million into Solana (SOL) related investments last week. This product outperformed other altcoins in terms of inflows, bringing its year-to-date (YTD) inflows to $57 million.
However, despite securing initial approval of its exchange-traded funds (ETF) from the United States Securities and Exchange Commission (SEC), Ethereum recorded only $10 million in inflows in the first week of July. It remains the only asset to have seen net outflows YTD.
The inflows were attributed to strong buying sentiment among investors who see the recent price weakness as a strategic buying opportunity to increase their crypto holdings. However, this improved sentiment has not been reflected in blockchain equities, which recorded additional outflows of $8 million last week.
Regional Performance and ETP Participation
Despite the positive inflow, participation in exchange-traded products (ETPs) remained remarkably low, standing at around $7.9 billion as of last week. This decline represents a 17% lower participation rate compared to the total market for trusted exchanges.
In terms of regional performance, the United States led with $384 million generated from the region alone. Opportunistic buying occurred across different nations worldwide, with Hong Kong recording an overall inflow of $32 million. Switzerland saw about $24 million in inflow and Canada recorded only $12 million.
Germany was an exception. While most other nations experienced inflows into digital asset products, Germany saw $23 million moved out of its digital asset investment products last week. The German government has been gradually selling its Bitcoin holdings in the market since June. As of July 8, the country still holds around $2.22 billion worth of BTC.
