Digital Asset Inflows Return as US Inflation Stays Low

Summary

  • Digital assets manager CoinShares reports that after three weeks of outflows, digital assets experienced a week of heavy inflows from institutional investors.
  • Bitcoin (BTC) dominated the inflows, taking in $27 million with other investments such as Ethereum (ETH), Uniswap (UNI), XRP, Solana (SOL) and Litecoin (LTC).
  • The improved sentiment is due to the recent US inflation data, which was slightly below expectations.

CoinShares Report on Digital Asset Fund Flows

Digital asset manager CoinShares recently released its Digital Asset Fund Flows Weekly Report. The report found that digital assets took in $29 million last week, ending a three-week run of outflows. According to the report, this improvement in sentiment is due to the recent US inflation data being slightly below expectations. This suggests that a September rate hike is less likely.

Bitcoin Dominates Inflows

The majority of these inflows were driven by Bitcoin (BTC), which took in $27 million. This brings BTC’s year-to-date inflows to $456 million. Interestingly, short-bitcoin saw outflows totaling $2.7 million which suggests that sentiment for Bitcoin and the broader crypto market remains supportive despite seasonally low volumes.

Other Assets See Inflows

In addition to Bitcoin’s strong performance, Ethereum (ETH) also saw inflows totaling $2.5 million while Uniswap (UNI), XRP, Solana (SOL) and Litecoin (LTC) received approximately $0.7 million, $0.5 million, $0.4 million and $0.1 million respectively in capital flows last week. Notably XRP has seen 16 weeks of consecutive inflows and its AuM has risen 127% since the beginning of 2021 so far.

Conclusion

Overall it appears that institutional investors have regained confidence in digital assets after three weeks of outflow following better than expected inflation data from the US government signifying less likelihood for a September rate hike now than previously anticipated

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