Digital Asset Investment Products See Record Cash Inflows of $3.85 Billion
The adoption of digital assets and Web3 protocols has increased following Donald Trump's recent re-election in the United States. More institutional investors are incorporating Bitcoin as a strategic reserve asset to combat high inflation and fiat devaluation.
Consequently, Bitcoin's price surpassed $100K for the first time since its inception. The altcoin sector also experienced significant growth, with Ethereum rebounding above $3,800 and TOTAL2 reaching an all-time high of over $1.57 trillion.
Major Cash Inflows to Digital Asset Investment Products Last Week
According to data from CoinShares, digital asset investment products recorded a net cash inflow of approximately $3.85 billion during the first week of December. This influx brought total year-to-date cash inflows to $41 billion, increasing assets under management to around $165 billion.
Bitcoin's investment products attracted notable cash inflows of about $2.54 billion last week, raising total assets under management to over $132 billion. Spot Bitcoin ETFs, particularly BlackRock’s IBIT, contributed significantly with cash inflows of about $2.73 billion.
Ethereum's investment products saw the highest inflows last week at approximately $1.159 billion, bringing total assets under management to about $19.6 billion. The US spot Ether ETFs, led by BlackRock’s ETHA with net cash inflows exceeding $572 million, were key drivers of this performance.
In contrast, Solana’s investment products faced outflows of about $14.1 million last week, benefiting Ethereum. Ripple Labs-backed XRP registered over $134 million in cash inflows, elevating its assets under management to more than $732 million, driven by increasing demand and multiple filings for spot ETF products in the United States.
Regionally, the United States, Switzerland, and Germany led in cash inflows, contributing approximately $3.6 billion, $160 million, and $116 million respectively.
Bigger Picture
The growing institutional adoption of digital assets is driving the ongoing 2024 bull market. Companies such as MicroStrategy Inc and Riot Platforms Inc have adopted Bitcoin as a hedge against fiat devaluation and rising inflation.
Experts on Wall Street predict that Bitcoin may surpass Gold in market capitalization in the coming years, with many governments recognizing Bitcoin as digital gold with expanding use cases.