Digital Asset Fund Flow Highlights

During the week of September 22 to 28, the most recent Digital Asset Fund Flows Weekly Report from European digital assets management firm CoinShares revealed a positive turn for digital asset investment products, marking the first time in six weeks that they saw increased interest.

The investment products tied to Bitcoin (BTC), denoted by tickers, observed a significant surge, attracting a total inflow of approximately $20.4 million during the week, as the price dropped to $27,419.

Good week, everyone. Here are the latest #FundFlows and observations by CoinShares Head of Research @JButterfill.

???? This week inflows: US$21m (after 6 weeks of outflows)

???? We believe these inflows are a reaction to a combination of positive price momentum, fears over US… pic.twitter.com/0VHHBh1n50

— CoinShares (@CoinSharesCo) October 2, 2023

In a surprising turn, Solana (SOL) investment products also experienced an influx of funds, totaling around $5 million, with the ticker showing a decrease to $23. This made Solana the second asset to witness inflows during this period. According to CoinShares, this marked the 27th week of inflows for Solana in 2023, positioning it as “one of the most favored altcoins this year.”

On the flip side, investment products associated with Ether (ETH), which registered a price drop to $1,642, saw outflows amounting to approximately $1.5 million. This unfortunate trend persisted for Ether, marking its seventh consecutive week of outflows and solidifying its status as “one of the least favored altcoins,” as stated by CoinShares.

For other altcoin investment products, including XRP (XRP) with a ticker showing a decrease to $0.53, the flows were negative and minimal, despite seeing more inflows than Solana in the prior week.

CoinShares analysts provided insights into the lack of movement in altcoins compared to Bitcoin's groundbreaking momentum, attributing it to a blend of factors. They stated, “We believe the influx of investments is a response to a combination of favorable price trends, concerns regarding US government debt prices, and recent uncertainties surrounding government funding.”

The referenced uncertainties pertain to ongoing negotiations regarding U.S. government funding. Earlier in the preceding week's cycle, concerns about a stalemate in the funding bill had sparked predictions of a government shutdown by October 2. Nevertheless, last-minute efforts by Senate leaders resulted in the passage of a stopgap measure, guaranteeing funding until November 17. Whether Congress and the president can reach an agreement to fund the government beyond this deadline remains uncertain.

In terms of geography, Germany, Canada, and Switzerland emerged as the frontrunners for the week, with digital asset investment product inflows reaching $17.7 million, $17.2 million, and $7.4 million, respectively. Australia and France had a more subdued response, with $100,000 and zero inflows, respectively.

On the contrary, the United States witnessed significant outflows amounting to $18.5 million, with Sweden and Brazil following suit at $1.8 million and $900,000 in outflows, respectively.

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