Investors continue to increase their participation in the cryptocurrency market for the eighth consecutive week, Coinshares analyst James Butterfill noted in the firm’s Digital Asset Fund Flows No. 158 weekly report, which was recently published.
Week after week, investors have remained interested in the main cryptocurrencies on the market, increasing their participation in cryptocurrency funds.
Compared to the participation volumes seen in crypto-based investment funds between 2020 and 2021, when many cryptocurrencies reached their current all-time highs, Current participation in these investment products has increased by 11%, he pointed Butterfill.
According to CoinShares analyst, on average, the long-term historical stake in cryptocurrency funds is 3,4%.
Regarding this increase in participation in cryptocurrency funds, Butterfill points out that the flow of inflows into the funds seems to coincide with the increase in cryptocurrency prices in the market.
Over the past 8 weeks, the price of Bitcoin, which remains the dominant cryptocurrency among investors, increased by 40%, while the price of Solana, which remains the second favorite among investors, grew by 190%.
Butterfill suggests that many investors are trading cryptocurrency funds with greater force as the market’s major cryptocurrencies surge in value.
Bitcoin ETF continues to drive inflows into crypto funds
The main reason behind the surge in cryptocurrency prices, and thus the rise in crypto investment funds, may still be the long-awaited approval of a Bitcoin spot exchange-traded fund (ETF) in the United States.
Butterfill stressed that The market is surrounded by a “continuous positive sentiment” related to the imminent approval of this investment vehicle.
Although the US Securities and Exchange Commission (SEC) has not yet come out in favour of this investment product, strategists and experts believe that its approval is inevitable and that authorisation by the securities regulator is only a question of when, not if.
Source: CoinShares
On the other hand, although cryptocurrency funds recorded inflows for the eighth consecutive week, the inflow this week decreased by 40% compared to the flow recorded the previous week. The inflow into crypto funds this week was $175,6 million, while the previous week's inflow was $293 million.
Bitcoin and Solana, investors' favorites
Bitcoin again accounted for almost all of the weekly inflows into cryptocurrency funds, with nearly $155 million. However, Bitcoin shorts saw outflows of nearly $9 million.
Source: CoinShares
Solana, the altcoin favorite, saw inflows worth $13,6 million, showing an increase of 8% over the last 7 days.
Ethereum recorded inflows of $3,3 million, while other cryptocurrencies such as Litecoin, XRP, and Cardano accumulated inflows worth $1,7 million combined.
Regarding the geographical location of the investors, Butterfill noted that they are the Investors from Canada, Germany and Switzerland are the most interested in cryptocurrencies, currently grossing $98 million, $63 million and $35 million, respectively.
US investors, who had poured more than $150 million into cryptocurrency funds earlier this month, turned cautious again, recording outflows totaling $19,2 million from crypto investment products.
Despite the decline in cryptocurrency fund flows over the past week, the CoinShares analyst suggests that investors, in general, are becoming increasingly interested in these investment products to gain exposure to the market's leading cryptocurrencies, while awaiting possible SEC approval of a Bitcoin exchange-traded fund.
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