Mystery Market Movements: Why Are Crypto Investors Pouring Millions into ETPs Amid a Bitcoin Sell-Off?

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Cryptocurrency exchange-traded products (ETPs) experienced inflows of $47 million last week amid a significant sell-off in Bitcoin. According to a report from CoinShares, macroeconomic data and insights from the US Federal Reserve about a strengthening economy and the central bank’s hawkish stance spurred a total of $1 billion in inflows, which was largely balanced by $940 million in outflows. Bitcoin investment products saw inflows of $213 million for the week of January 6 to January 10, maintaining its position as the best-performing asset of the year with $799 million in year-to-date inflows. However, Bitcoin ETPs’ total assets under management fell by 3.5%, from $130 billion to $125.4 billion, following the sell-off.

Ethereum investment products experienced the most significant outflows, totaling $256 million, attributed to a wider tech sell-off rather than specific issues with Ethereum itself. In contrast, XRP, the third-largest cryptocurrency by market capitalization, observed robust inflows of $41 million. This surge is believed to be driven by political and legal factors, particularly optimism surrounding the upcoming appeal deadline set by the US Securities and Exchange Commission.


In the realm of altcoins, Aave, Stellar, and Polkadot attracted notable investments despite underperforming in price, with inflows of $2.9 million, $2.7 million, and $1.6 million, respectively. Regionally, last week saw the US leading crypto ETP inflows with $79 million, while Switzerland recorded the largest outflows at $85 million. Other significant inflows came from Germany and Canada at $52 million and $37 million, respectively, whereas Hong Kong and Sweden saw outflows of approximately $37 million and $33 million.