Digital Asset Funds See Largest Weekly Inflows Since July 2022

• Digital asset investment products record the first week of inflows after seeing $408 million in net outflows over the past six weeks, the latest weekly CoinShares report showed. The funds saw $160 million in inflows last week, the biggest since July 2022.

  Digital Asset Funds Saw $160M in Inflows Last Week

  According to a new report by CoinShares, digital asset funds saw $160 million in inflows last week. This figure, representing the biggest weekly inflows since July 2022, marks a sharp turnaround for digital asset investment products following six weeks of net outflows, totaling $408 million.

  The positive sentiment toward digital asset funds lagged the one recently seen in the broader crypto market. However, that is likely due to growing concerns among investors over the stability in the traditional finance (TradFi) sector in the wake of a significant banking crisis triggered by the collapse of Silicon Valley Bank (SVB) earlier this month.

  The SVB collapse, considered the most extensive banking failure since 2008, caused havoc in the sector. Citing systemic risks, the US regulators shut down the crypto-friendly Signature Bank just days after closing down SVB.

  But the banking sector also felt some relief on Monday after the First Citizens bank said it has agreed to acquire deposits and loans of SVB. Under the terms of the deal, First Citizens Bank & Trust Company will assume SVB assets of $110 billion, deposits of $56 billion, and loans of $72 billion. Bank stocks soared sharply in premarket on the news.

  Short Bitcoin Products Record $31M in Inflows Despite Positive Sentiment

  The new weekly report showed that Bitcoin-based funds received the most inflows last week, at almost $128 million. Interestingly, short Bitcoin products also saw inflows of $31 million, indicating that some investors are still skeptical about digital asset funds. Short bitcoin-related funds remain the investment product with the highest inflows in 2023.

  Ethereum-based funds saw outflows of $5.2 million last week, its third consecutive week of outflows. According to CoinShares, investors’ worries over the upcoming Shanghai upgrade could be one of the reasons behind the negative sentiment.

  Regionally, digital asset investment products saw inflows from many countries, signaling a major improvement in the asset class. The highest inflows were seen in the US ($69m), Germany ($58m), and Canada ($26m).

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