From Crash to Cash: Crypto ETPs Skyrocket to $85 Billion in Epic Comeback

In a surprising turn of events, crypto investment products have experienced a significant influx of capital, with inflows reaching $176 million as investors seised the opportunity presented by recent price dips. This insight comes from CoinShares' latest weekly report, shedding light on the resilience and opportunistic nature of crypto investors.

Market Correction and Rebound

James Butterfill, the head of research at CoinShares, highlighted that the total assets under management (AUM) for crypto Exchange-Traded Products (ETPs) initially dipped to $75 billion during the market correction. However, in a testament to the market's resilience, the AUM has since rebounded to $85 billion, showcasing the swift recovery of the crypto investment landscape.

Surge in Trading Volume

One of the most notable aspects of this market movement was the surge in trading volume for ETPs. The period saw trading volumes skyrocket to $19 billion, significantly surpassing this year's weekly average of $14 billion. This increased activity indicates a heightened interest from investors looking to capitalise on market fluctuations.

Ethereum Leads the Charge

Ethereum emerged as the primary beneficiary of the market correction, attracting a staggering $155 million in inflows last week. This influx has propelled Ethereum's year-to-date inflows to $862 million, marking its highest level since 2021. The recent launch of US spot-based ETFs has been a key driver behind this impressive performance.

Market experts have been quick to praise the performance of Ethereum ETFs since their launch in July. Nate Geraci, president of ETF Store, pointed out that BlackRock's iShares Ethereum ETF has become one of the top six ETF launches in 2024, attracting over $900 million in less than three weeks and poised to hit the $1 billion mark.

Bitcoin's Mixed Performance

While Ethereum stole the spotlight, Bitcoin experienced a mixed week. The flagship cryptocurrency started with outflows but saw a trend reversal towards the end of the week, with investors injecting $13 million into BTC-related investment products.

Interestingly, short Bitcoin ETPs faced their most significant outflows since May 2023, amounting to $16 million or 23% of their AUM. This reduction in short positions reflects a significant shift in investor sentiment, possibly indicating growing confidence in Bitcoin's upward trajectory.

Broad Positive Sentiment

The positive sentiment wasn't limited to major cryptocurrencies. Other digital assets, including Solana, XRP, Cardano, and Litecoin, also saw modest inflows totalling about $6 million last week.

Perhaps most notably, inflows were observed across all regions, signalling a broad positive sentiment toward the asset class following the recent price correction. The United States led with $89 million in inflows, followed by Switzerland with $20 million, Brazil with $19 million, and Canada with $12.6 million.

Conclusion

This recent surge in inflows to crypto investment products amid a market correction demonstrates the maturity and resilience of the crypto market. Investors appear to be viewing price dips as buying opportunities, particularly for established cryptocurrencies like Ethereum and Bitcoin. As the market continues to evolve, it will be interesting to see how these trends develop and what implications they may have for the broader adoption of cryptocurrencies as investment assets.

‍