Digital asset exchange-traded products (ETPs) experienced a remarkable turnaround last week, with a total of $572 million in net inflows, as reported by CoinShares. This surge came after the market initially faced $1 billion in outflows earlier in the week, which was attributed to weak US payroll data. However, a sudden influx of $1.57 billion in inflows more than made up for the losses, ultimately ending the week on a positive note.
James Butterfill, Head of Research at CoinShares, pointed to a significant policy development in the United States as a key driver for this shift. President Donald Trump signed an executive order on August 7, directing the Department of Labor to allow for crypto, private equity, and other alternative assets in 401(k) retirement plans.
Despite the strong inflows, trading volumes for digital asset ETPs remained 23% lower than the previous month, which Butterfill attributed to the quieter summer period.
In terms of specific assets, Ethereum ETPs took the lead with $268 million in inflows, marking the highest inflow for any asset last week. This brought Ethereum’s year-to-date inflows to a record-breaking $8.2 billion and boosted its assets under management (AuM) by 82% to an all-time high of $32.6 billion. With ETH surpassing the $4,000 mark, market participants are anticipating further gains towards $5,000 by the end of the year.
Bitcoin also saw a strong recovery with $206 million in inflows last week after experiencing two consecutive outflows. BTC-focused funds have attracted over $20 billion in new capital this year, led by BlackRock’s IBIT, which has received over $26 billion in inflows.
In addition to Ethereum and Bitcoin, XRP and Solana garnered significant institutional interest, attracting inflows of $18.4 million and $21.8 million, respectively. These inflows pushed XRP-focused funds to a record high of $1.1 billion and Solana funds to $874 million in inflows.
On a regional level, the US led global inflows with $608 million, followed by Canada at $16.5 million and Australia at $7.9 million. Hong Kong and Switzerland also saw modest gains of $1.4 million and $1.1 million, respectively. However, European markets, particularly Germany and Sweden, faced combined outflows of $50 million.
Overall, the influx of capital into digital asset ETPs indicates a growing interest from institutional investors in a diverse range of assets beyond just Bitcoin and Ethereum. With market dynamics constantly evolving, it will be interesting to see how these trends continue to shape the digital asset landscape in the coming months.