This week, Ethereum surpassed Bitcoin in inflows into cryptocurrency investment funds, after its price fell to $2.100. According to CoinShares, investors took advantage of the cryptocurrency's weakness, although Bitcoin remains the favorite in the market.
Ethereum is emerging as the main player in the investment market. According to CoinShares’ weekly report on capital flows into these financial instruments, Ethereum has surpassed Bitcoin in terms of weekly fund inflows, marking a notable shift in investor sentiment.
The firm explained that this move occurred in a context in which the price of Ethereum experienced a sharp drop, approaching $2.100 per unit, which apparently triggered a wave of strategic purchases by investors seeking to capitalize on the market weakness.
BUY ETHEREUMEthereum takes the lead in investment funds
The CoinShares report highlights that Ethereum attracted $793 million in fund inflows during the week under review, significantly outperforming the $407 million that entered Bitcoin-based investment products. This is the first time this year that Ethereum has surpassed Bitcoin in terms of weekly flows, which is indicative of growing investor interest in the crypto industry’s second-largest cryptocurrency by capitalization.
CoinShares analysts suggest that Ethereum's price drop near $2.100 acted as a catalyst for buying as investors saw an opportunity to acquire the cryptocurrency at a lower price.
Source: coinshares
Besides Ethereum and Bitcoin, other cryptocurrencies also saw notable inflows. For example, XRP attracted $21 million, while Solana received $11 million in investment.
These numbers reflect a continued diversification in the cryptoasset market, where investors are exploring alternatives to more established cryptocurrencies. Blockchain stocks also saw inflows of $33 million, bringing year-to-date inflows to $194 million overall. This interest in blockchain stocks suggests that investors are also seeking exposure to the digital asset ecosystem through companies operating in this sector.
Bitcoin is still the king
Despite Ethereum’s recent surge, Bitcoin remains the undisputed leader in terms of total investment in cryptoassets. Throughout the year, Bitcoin has attracted the majority of investment flows, consolidating its position as the dominant cryptocurrency.
The fact that Bitcoin ETPs (Exchange Traded Products) worldwide now account for 7,1% of the current market capitalization underlines the importance of this cryptocurrency.
On the other hand, the firm emphasized that the recent drop in cryptocurrency prices seems to have been the main catalyst for significant purchases this week, accumulating inflows of $1.300 billion in total. This is the fifth consecutive week in which crypto-asset-based funds have recorded positive inflows. So far this year, inflows exceed $7.300 billion, according to CoinShares.
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Pectra could be implemented in April
While Ethereum’s price drop may have acted as a key catalyst for buying, other factors such as the upcoming network upgrade could also be driving the growing interest in this cryptocurrency.
Pectra is an upgrade that promises to improve Ethereum’s scalability, security, and functionality, potentially attracting more investors and users to the platform.
Furthermore, the ecosystem of decentralized applications (dApps) and decentralized finance (DeFi) on Ethereum continues to grow and mature. More and more projects and companies are building on Ethereum, increasing its utility and attractiveness to investors. Also, Ethereum’s ability to facilitate complex transactions and smart contracts makes it a critical platform for innovation in the blockchain space.
In summary, the week analyzed by CoinShares has witnessed a notable shift in investment flows into crypto assets, with Ethereum overtaking Bitcoin in terms of weekly inflows.
IMPORTANT: The content of this article is for informational purposes only and, in no case, what is written here should be taken as investment advice or recommendations. Bit2Me News reminds you that before making any investment you should educate yourself and know where you invest your money, as well as the pros and cons of the system. We separate ourselves from the actions and consequences that ignorance may entail. If you decide to invest in this or another asset class, you are solely responsible for the consequences that your decisions and actions may have.
