For the seventh week in a row, money poured into BTC funds, while ETH products saw their biggest gain in 13 weeks.
Despite geopolitical instability and central bank monetary tightening, inflows into cryptocurrency investment funds increased dramatically last week, signaling cautious optimism that investors are increasing their exposure to digital assets.
According to CoinShares data, digital asset investment products received $127 million in cumulative inflows for the week ending March 6. This was the greatest weekly inflows since December 12, 2021, according to a CoinShares spokesman. The rise was also much greater than the previous week’s inflows of $36 million.
Bitcoin (BTC) products, as in previous weeks, saw the highest weekly inflows of $95 million. For the seventh week in a row, bitcoin fund flows have surged. Inflows to Ether (ETH) funds totaled $25 million, the most in 13 weeks. In addition, $8.6 million was invested in multi-asset investment packages.
Bitcoin funds have received $166 million in total inflows so far this year.
Since the outbreak of the Covid-19 pandemic, crypto markets have had a greater correlation with public stocks, implying that legacy finance’s recent shift to a more risk-off environment has harmed digital assets. The Federal Reserve’s efforts to begin normalizing monetary policy were a major factor in this move. The current events in Ukraine have also harmed demand for higher-risk assets, such as cryptocurrency.
The association between stocks and cryptocurrency, though, is a “short-lived thing,” according to crypto hedge fund Pantera Capital. Since 2010, correlations between Bitcoin and the S&P 500 have typically spiked during a two-month period before decoupling, according to CEO Dan Morehead. During that time, Morehead identified six downtrends in the S&P 500.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.