Bitcoin Drives Crypto Investment to $17.8 Billion Year-to-Date

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Crypto inflows increased last week, recording $1.44 billion in positive flows to digital asset investment products. This brings year-to-date (YTD) inflows to $17.8 billion, effectively beating 2021 highs.

The crypto market is staging a recovery, flashing green as Bitcoin (BTC) treads in the $62,000 range. The global cryptocurrency market capitalization is up almost 5% as BTC’s show of strength imparts momentum among altcoins.

Crypto Asset Inflows Reach $17.8 Billion

Digital asset inflows beat 2021 highs of $10.6 billion last week, reaching $17.8 billion as crypto markets recover. The US recorded $1.3 billion in inflows, accounting for the lion’s share of the positive flows. However, bullish sentiment is not limited to its borders, as Switzerland, Hong Kong, and Canada posted commendable inflows — $58 million, $55 million, and $24 million, respectively.

In a recent post, CoinShares highlighted up to $1.35 billion in Bitcoin inflows, marking the fifth-largest weekly inflows. James Butterfill ascribes the positive flows to investors capitalizing on the German Government’s supply pressure on BTC to buy the dip. He also acknowledges the role of the US Consumer Price Index (CPI), which is coming in lower than expected in inspiring accumulation.

“We believe price weakness due to the German Government bitcoin sales and a turnaround in sentiment due to lower than expect CPI in the US prompted investor to add to positions,” Butterfill wrote.

Ethereum (ETH), on the other hand, recorded $72 million in inflows, marking the largest positive flows since March. This capital influx comes amid anticipation for spot Ethereum ETFs this week, with a survey showing significant interest among US-based investors.

Kraken’s Head of Strategy, Thomas Perfumo, said these ETH-based investment products going live could elevate the market, potentially catapulting monthly inflows between $750 million and $1 billion.

“I think the market is priced in something along the lines of $750 million to $1 billion of net inflows to Ethereum ETF products every month and so if we try to match that, it creates positive support for the industry,” Perfumo stated.

Solana, Avalanche, and Chainlink also recorded positive flows of $4.4 million, $2 million, and $1.3 million, respectively. These inflows last week set the stage for the market recovery on Monday.

Nevertheless, the report highlights low trading volumes, suggesting a lack of conviction and abounding caution among traders.

“Volumes remained low though at $8.9 billion for the week, compared to the seven-day average this year of $21 billion,” CoinShares’ report noted.

Exchange Data Shows Investor Caution

The low volumes seen last week, ascribed to investor caution, go back to June. Data compiled by the WuBlockchain team shows decreased market participation, likely because of weak confidence in the market.

Specifically, the team noted:

A 17% drop in spot trading volume of major exchanges month-on-month.
A 19% drop in the derivatives trading volume of major exchanges month-on-month.
A 1% drop in website traffic of major exchanges

A shift in sentiment is visible in the market, inspired by, among others, reports that Germany’s state of Saxony depleted its BTC, and therefore, there is no more selling. Traders and investors have also recovered from the panic following Mt. Gox repayment news.

At the time of writing, Bitcoin has been trading for $62,955, up over 5% in the last 24 hours.

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