Last week saw a remarkable influx of capital into digital asset investment products, amounting to $346 million, according to CoinShares’ most recent data.

This figure represents the most significant weekly inflow in a consecutive nine-week run and marks a pivotal point last seen during the bull market enthusiasm of late 2021. According to the reported figures, the inflow spike has propelled the total assets under management (AuM) to a staggering $45.3 billion, the highest in over eighteen months.

Canada and Germany accounted for 87% of the total, with inflows of $199.1 million and $101.5 million, respectively. In contrast, the United States saw a relatively modest $30 million, presumably as investors hold out for a spot-based Exchange-Traded Fund (ETF) launch stateside.

However, the U.S. still has a far higher amount of assets under management, with $33.1 billion, over ten times more than the next highest country.

Bitcoin and Ethereum Lead the Charge

Bitcoin attracted $311.5 million in inflows last week, culminating in year-to-date inflows surpassing $1.5 billion. This robust accumulation comes when short-sellers appear to retreat, as evidenced by the third consecutive week of outflows at $900,000 from short-Bitcoin ETPs.

Ethereum followed suit with $33.5 million in inflows, contributing to a four-week total of $103 million. This trend nearly neutralizes the year’s prior outflows and signifies a decisive shift in investor sentiment for the second-largest digital asset by market capitalization.

Implications for the Crypto Market

The infusion of capital into other cryptocurrencies like Solana, Polkadot, and Chainlink, although modest in comparison, indicates a diversified investment interest within the sector. The sustained use of Exchange-Traded Products (ETPs) further highlights an increased preference for regulated financial instruments to gain crypto exposure, with ETPs accounting for 18% of total spot Bitcoin volumes last week.

This financial movement aligns with the heightened anticipation of a US-based spot ETF. The rise in AuM and the consistent inflows into both primary and alternative digital assets suggest an increasingly optimistic market, or at the very least, betting on the potential of a more regulated and accessible cryptocurrency investment landscape.

Butterfill stated there has been “a decisive turn-around in sentiment,” and the data appears to represent a snapshot of an industry at an inflection point, with investor sentiment and market dynamics aligning in a way that could define the trajectory of the crypto market for the foreseeable future.

View the full CoinShares weekly report on James Butterfill’s Medium blog.