After a period of net outflows, digital asset investment products worldwide experienced a significant resurgence last week, attracting $2.48 billion in new capital, according to a recent report from CoinShares.
This renewed interest boosted total net inflows for August to $4.37 billion, bringing the year-to-date total to an impressive $35.5 billion.
James Butterfill, Head of Research at CoinShares, observed that strong inflows persisted until late in the week. He attributed a shift in sentiment on Friday to the release of the Core PCE inflation data, which failed to solidify expectations for a rate cut by the Federal Reserve in September.
This disappointment, coupled with a slowdown in price gains, negatively impacted the overall market, leading to a 10% decrease in total assets under management to $219 billion.
Ethereum Gains on Bitcoin
Ethereum continued to be a popular choice for investors during the period, with the second-largest cryptocurrency by market capitalization attracting significant interest.
CoinShares data indicates that investment funds focused on ETH received $1.4 billion in new investments last week, almost double the $748 million attracted by Bitcoin.
Month-to-date figures further highlight this trend, with Ethereum experiencing $3.95 billion in new inflows last month, while Bitcoin saw $301 million in net outflows.
CoinShares suggests this could indicate a strategic asset reallocation, with investors shifting their exposure away from Bitcoin and towards other major cryptocurrencies.
Other alternative cryptocurrencies also seem to be benefiting from this portfolio shift.
According to CoinShares, Solana-based products recorded inflows of $177 million, while XRP attracted $134 million, potentially fueled by increasing anticipation of spot ETF approvals. Together, these two digital assets saw almost $700 million in inflows during August.
In contrast, Cardano and Chainlink experienced smaller inflows of $5.2 million and $3.6 million, respectively, while Sui registered outflows of $5.8 million.
Geographically, crypto investment products in the United States continue to be the primary driver of investment activity.
CoinShares data shows that US-based funds saw inflows of $2.29 billion last week, followed by investors in Switzerland ($109.4 million), Germany ($69.9 million), and Canada ($41.1 million).
Considering these trends, CoinShares suggests that the widespread distribution of inflows indicates Friday’s market downturn was likely due to short-term profit-taking, rather than the beginning of a more significant correction.