The latest weekly digital asset fund flows from CoinShares shed light on the ongoing dynamics among institutional investors when investing in altcoins such as XRP, Solana, and Cardano. Most of the inflow activity went into Bitcoin, but the report also highlights a diverse set of trends among altcoins to show preferences and strategies investors are employing across the wider crypto landscape. For one, Ethereum and Cardano ended the week with a huge outflow, while coins like XRP and Solana bucked and attracted inflows.
XRP Inflows, Cardano And ETH Outflows
According to CoinShares, digital asset investment products witnessed a total inflow of $321 million last week, bringing the inflow trend to a second consecutive week. This interest, which was mirrored in the spot price of many cryptocurrencies, was driven by the Federal Open Market Committee (FOMC) decision to cut interest rates by 50bp last week. This led to a strong investment interest among investors particularly in the United States. As a result, the total asset under management of crypto funds grew by 9%.
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Bitcoin led the charge with a staggering $284 million worth of inflow. However, what stood out was the simultaneous inflow of $5.1 million into short Bitcoin products. This indicates that some investors are still positioning themselves for potential downside risks.
In contrast, Ethereum continued its streak of outflows, extending to a fifth consecutive week. The ongoing outflows, largely driven by the Grayscale Ethereum Trust, amounted to $28.5 million last week, bringing its month-to-date outflows to a significant $145.7 million.
Despite Ethereum’s influence over the altcoin market, the crypto’s bearish sentiment among institutional investors fortunately failed to materialize among other cryptocurrencies. XRP, for one, witnessed $0.1 million worth of inflows last week, heralded by interest surrounding the launch of Grayscale’s XRP trust. Similarly, Solana and Litecoin witnessed another week of consistent inflows of $3.2 million and $0.1 million, respectively. The most notable among these were the multi-asset investment products, which witnessed $54.2 million in inflows to effectively cancel out Ethereum’s outflows. On the other hand, Cardano-based investment products were not as fortunate, as they witnessed $0.2 million in outflows.
What’s Next For Institutional Investors?
Last week’s inflow trend marks the beginning of what seems like many to come. This is because the crypto industry is largely starting to enter a bullish phase, with the recent multi-month corrections looking like they are finally over.
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Bitcoin, for instance, looks prime for a bull run, supported by key on-chain metrics and the prospect of further Fed interest rate cuts. Interest among institutional investors is a key factor in this upcoming bull run, as huge inflows from them will undoubtedly bode well for the Bitcoin price. This will lead to a corresponding inflow into altcoins, and we could eventually also see Ethereum start to attract institutional inflows in the coming weeks.
Featured image created with Dall.E, chart from Tradingview.com