Crypto Has Just Had the Biggest Digital Asset Fund Inflows Since October 2021

The cryptocurrency market has steadily recovered since the beginning of the year, with the total crypto market cap back above $1 trillion. Amid this recovery, digital asset investment products reported minor inflows of $9.2 million last week.

Digital asset investment products record significant inflows

A report by CoinShares noted that the recent price increase across different crypto assets had resulted in a weekly gain of more than 13% in assets under management. This was the largest gain since October 2021.

While digital asset investment products reported minor outflows of $9.2 million last week, trading volumes for these products remained low, totaling $866 million during the week. The inflows and the trading volumes reported during the week suggested that investment products did not cause the recent rally in the crypto market.

The assets under management have also increased by more than 13% as crypto assets report gains. Ethereum, the second-largest cryptocurrency by market capitalization, broke its 8-week streak of outflows, with inflows of $5.6 million. The increase in outflows resulted from the improvement in market sentiment.

Multi-asset investment products have continued to suffer the blow of the recent bearish pressure across the crypto market that persisted for most of 2022. These products reported $3.2 million in outflows, with its seventh week totaling $16 million.

On the other hand, investors pulled back from various investment products. Moreover, there have been significant inflows in some digital assets, suggesting that investors are becoming more specific with what they are putting their money into.

Investors seem to be less focused on altcoins during the recent bull run. Solana and Polkadot reported inflows of $1.3 million and $0.4 million, respectively. On the other hand, XRP reversed the gains it reported during the previous week, with the outflows totaling $3.3 million.

Nevertheless, there has been a positive sentiment around blockchain equities, and they reported inflows of $3.8 million. The positive sentiment around these assets comes from the gains in the crypto market in recent weeks.

Bloomberg strategist weighs in on the recent crypto bull run

Amid the rising crypto prices and inflows across digital asset investment products, crypto investors are anxious over whether the recent rally will be sustained. Mike McGlone, a senior commodity strategist at Bloomberg, said Bitcoin could be forming a “bottom” as it did before the 2019 bull rally.

However, McGlone noted differences between the 2019 rally and the current one, as in 2018, the Federal Reserve was easing interest rates, and now, they were tightening. Central banks worldwide have been tightening to tame the rising inflation levels.

The Bloomberg strategist also said that Bitcoin might fail to see the surge being presented as there were challenging macroeconomic conditions at play. Moreover, he anticipates that Nasdaq will drop below the 200-week moving average, indicating that a rally in Bitcoin might fail to happen soon.

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