Cryptocurrency Investment Products Set Record for Inflows as Bitcoin Surges Past $100,000
In a landmark week for the cryptocurrency market, digital asset investment products saw their largest inflows on record, with $3.85 billion invested during the trading week of Dec. 2–6, according to a report by crypto investment firm CoinShares.
This latest milestone in crypto investments comes just a few weeks after crypto investment products smashed the previous record of $3.12 billion set in November when Bitcoin (BTC) traded at about $98,000. The new high in weekly crypto inflows coincided with Bitcoin breaking above $100,000 for the first time on record on Dec. 5, reaching an all-time high of $104,000.
Bitcoin Leads with $2.5 Billion in Inflows
Coinciding with the Bitcoin price hitting new highs last week, BTC investment products led total crypto weekly inflows with $2.5 billion, bringing year-to-date inflows to $36.5 billion. Short Bitcoin investors were less active last week, with short BTC products seeing tepid inflows of $6.2 million.
Flows by Assets (in millions of US dollars)
| Asset | Weekly Inflows |
| — | — |
| Bitcoin (BTC) | 2500 |
| Ethereum (ETH) | 1200 |
| Blockchain Equities | 124 |
| Solana (SOL) | -14 |
Source: CoinShares’ report
Historical Patterns Suggest Investors Remain Cautious
Historically, we have seen much higher inflows after sharp price rises, suggesting investors remain cautious on betting against the recent strong momentum,’ CoinShares’ head of research, James Butterfill, wrote in the update. This sentiment is reflected in the current market dynamics, where investors are increasingly turning to long-term investments in cryptocurrencies.
Ethereum ETPs See Largest Weekly Inflows on Record
Ethereum, the second-largest blockchain network in terms of market capitalization after Bitcoin, also set new records in crypto investments last week amid Ether (ETH) surging past $4,000 on Dec. 6. According to CoinShares, Ethereum products saw $1.2 billion in weekly inflows last week, its largest inflows on record since the first Ethereum exchange-traded funds (ETFs) started trading in the United States in July.
Solana Products See Second Consecutive Week of Outflows
A spike in Ethereum ETF investments came ‘at the expense’ of Solana, which has seen $14 million in outflows, Butterfill noted. This development suggests that investors are shifting their focus towards more stable and established cryptocurrencies like Ethereum.
Blockchain Equities Experience Largest Inflows Since January
Additionally, blockchain equities saw inflows of $124 million, the largest since January, driven by growing investor confidence in improving Bitcoin miner margins, Butterfill said. This trend underscores the increasing recognition of the fundamental value of blockchain technology and its applications in various sectors.
Cryptocurrency ETFs Experience Massive Year in 2024
Cryptocurrency ETFs have seen a massive year in 2024 following the historic launch of spot Bitcoin ETF trading in the US in January. On Dec. 6, Bitcoin ETF holdings surpassed 1.1 million BTC combined for the first time, surpassing those held by the anonymous Bitcoin creator, Satoshi Nakamoto.
Implications for Investors and Market Dynamics
The record-breaking inflows into cryptocurrency investment products have significant implications for investors and market dynamics. As more investors turn to cryptocurrencies as a store of value and a hedge against inflation, it is essential to understand the underlying trends driving this growth.
In conclusion, the recent surge in cryptocurrency prices has led to unprecedented levels of investment in digital asset products. As the market continues to evolve, it will be crucial for investors to stay informed about the latest developments and adjust their strategies accordingly.
Sources:
- CoinShares’ report
- Blockchain Equities’ analysis
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