Digital Assets Rally Leaves Investors Polarized

Takeaways

• Digital asset investment products saw US$37m inflows last week, although this was predominantly into short investment products (68%).
• Regionally, opinion is very polarised. Inflows were seen in Europe, most notably Germany and Switzerland with US$14m and US$10m respectively.
• Hong Kong saw outflows from long investment products, while the 95% of the inflows into the US were into short-Bitcoin products.

Digital asset investment products saw US$37m inflows last week, although this was predominantly into short investment products (68%). Trading activity for the week was high at US$1.6bn, above the 90-day average. of US$990m, with 80% of the trading focussed on Bitcoin. Total assets under management after recent price appreciation is now at US$29bn, the highest since September 2022.

Regionally, opinion is very polarised. Inflows were seen in Europe, most notably Germany and Switzerland with US$14m and US$10m respectively. Outflows were seen in European short investment products too, suggesting sentiment is positive. In contrast, Hong Kong saw outflows from long investment products (US$11m), while the 95% of the inflows into the US were into short-Bitcoin products.

Bitcoin saw inflows totalling US$5.7m last week, while short-bitcoin investment products saw inflows totalling US$25.5m, the largest weekly inflow since July 2022 (US$51m).

In contrast to Bitcoin, a large number of altcoins saw inflows, most notable of which were Ethereum, Polkadot, Cardano, XRP and Avalanche with US$4.2m, US$1.0m, US$0.6m, US$0.6m and US$0.5m respectively.

Blockchain equities also saw inflows totalling US$7.1m last week.

Contact James Butterfill at [email protected]