Key Points
- Following Donald Trump’s re-election, digital assets and Web3 protocols have seen increased mainstream adoption, with Bitcoin reaching a milestone of over $100K.
- Digital asset investment products registered net cash inflows of approximately $3.85 billion in the first week of December, with Bitcoin and Ethereum leading the way.
After the re-election of Donald Trump in the United States, there has been a surge in the mainstream adoption of digital assets and Web3 protocols. This is largely due to more institutional investors adding Bitcoin as a strategic reserve asset to combat high inflation and ongoing fiat devaluations.
Bitcoin’s price has recently reached a significant milestone of above $100K for the first time since its inception. Concurrently, the altcoin industry has gained substantial bullish momentum after Ethereum rebounded above $3,800 and the TOTAL2 surged to its all-time high of above $1.57 trillion.
Significant Cash Inflows into Digital Asset Investment Products
Market data provided by CoinShares indicates that digital asset investment products registered a net cash inflow of about $3.85 billion during the first week of December. This has resulted in total cash inflows YTD surging to $41 billion, pushing the assets under management to hover about $165 billion.
Bitcoin’s investment products led the way with notable cash inflows last week of around $2.54 billion. As a result, the total assets under management for Bitcoin’s investment products have surged to over $132 billion. The significant cash inflows in the spot Bitcoin ETFs of about $2.73 billion, led by BlackRock’s IBIT, heavily influenced last week’s performance.
Ethereum’s investment products registered the highest cash inflows last week of about $1.159 billion, thus increasing the total assets under management to about $19.6 billion. The impressive performance of US spot Ether ETFs, led by BlackRock’s ETHA with a net cash inflow of over $572 million, largely influenced the record weekly inflows.
Performance of Other Digital Assets
Despite the poor performance of Solana’s investment products in the past two weeks, an overall outflow of about $14.1 million last week, this has significantly favored Ethereum.
XRP, backed by Ripple Labs, registered more than $134 million in total cash inflows last week, thus raising its assets under management to over $732 million. The rising demand for XRP, as shown by the several filings of spot ETF products in the United States, has favored notable cash inflows and impressive performance.
The United States, Switzerland, and Germany led in notable cash inflows of about $3.6 billion, $160 million, and $116 million respectively.
Impact on the Market
The rising adoption of digital assets by institutional investors has fueled the ongoing 2024 bull market. More institutional investors led by MicroStrategy Inc (NASDAQ: MSTR) and Riot Platforms Inc (NASDAQ: RIOT) have adopted Bitcoin as a hedge against fiat devaluation and rising inflation.
As a result, Wall Street experts believe that Bitcoin is well-positioned to outshine Gold in market cap over the coming years. Furthermore, more governments view Bitcoin as a digital gold with more use cases.
