Crypto ETPs rebound with over $1 billion in weekly inflows prior to latest price slump: CoinShares

Global crypto investment products managed by asset managers such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares witnessed net inflows of $1.07 billion last week, according to CoinShares' data.

That marked a turnaround in sentiment following four consecutive weeks of net outflows totaling $5.7 billion, helped by hopes of an imminent U.S. rate cut following comments from FOMC member John Williams stating monetary policy remains restrictive, CoinShares Head of Research James Butterfill noted in a new report.

However, that came before bitcoin dropped by more than 5% early Monday, with the broader crypto market seeing amplified losses amid reports that the Bank of Japan is considering rate hikes in December. It also wasn't enough to prevent a negative month overall, with a total of $3.2 billion exiting global crypto funds during November.

Meanwhile, crypto ETP trading volumes fell to around $24 billion last week, in stark contrast to the record $56 billion the week before — likely due to the U.S. Thanksgiving holiday, Butterfill noted.

Weekly crypto asset flows. Image: CoinShares.

US dominates despite holiday lull

Despite the Thanksgiving holiday, the U.S. continued to dominate weekly flows, with crypto funds in the country adding $994 million alone last week. Digital asset investment products in Canada and Switzerland also notched notable inflows of $97.6 million and $24.6 million, respectively, while Germany was one of the only countries where crypto funds witnessed net outflows, with $55.5 million worth of redemptions.

Bitcoin-based ETPs again led the flows in terms of the underlying asset, adding $461 million last week, with investors reversing bets on further price declines as indicated by the $1.9 million outflows in short-bitcoin ETPs, Butterfill argued.

The U.S. spot Bitcoin exchange-traded funds generated $70.1 million worth of net inflows last week amid the holiday lull, according to data compiled by The Block. That was led by around $230.5 million of inflows into Fidelity's FBTC, offset by substantial outflows from other funds.

Ethereum products also fared better, witnessing net inflows of $308 million globally last week, with the U.S.-based spot Ethereum ETFs accounting for $312.6 million, offset by outflows in other regions.

Meanwhile, XRP-based funds logged a record $289 million in weekly inflows, with their six-week streak now representing 29% of total assets under management — a surge likely tied to the recent U.S. spot ETF launches, Butterfill said.