Last week, cryptocurrency investment products experienced their highest inflows ever, sparked by a rally in spot crypto markets due to the US government shutdown.
Global crypto exchange-traded products (ETPs) saw inflows of $5.95 billion in the week ending Friday — the largest amount recorded — as CoinShares reported on Monday.
“This surge is likely a delayed reaction to the FOMC [Federal Open Market Committee] interest rate cut, exacerbated by low employment data […], and worries about US government stability following the shutdown,” stated CoinShares’ head of research, James Butterfill.
The record inflows aligned with an overall bullish trend in crypto markets, leading to Bitcoin (BTC) reaching a new all-time high over $125,000 on Saturday.
Bitcoin ETPs break records
With these inflows hitting $5.95 billion, crypto ETPs eclipsed the previous record of $4.4 billion from mid-July by 35%.
In contrast to earlier record inflows, which were nearly evenly split between Bitcoin and Ether (ETH), the latest surge was predominantly driven by BTC, attracting a record $3.6 billion.
“Even with prices nearing all-time highs this week, investors opted not to purchase short investment products,” noted CoinShares’ Butterfill.
Ether ETPs garnered inflows of $1.48 billion, pushing their year-to-date inflows to a record $13.7 billion, nearly triple last year’s figures, Butterfill noted.
Solana (SOL) ETP inflows ranked third at $706.5 million, followed by XRP (XRP) with $219.4 million, both achieving record highs, according to CoinShares.
Related: Companies spent $1.2B on Bitcoin last week, but BTC ETFs were the highlight
In line with the remarkable inflows, total assets under management (AUM) for crypto funds surpassed $250 billion for the first time, reaching a new peak of $254.4 billion.
New ETF launches amid shutdown-related delays
The historic inflows for crypto ETPs coincided with the US Securities and Exchange Commission (SEC) halting operations last week, raising concerns about potential delays in upcoming exchange-traded fund (ETF) approvals this October.
According to Crypto in America’s Eleanor Terrett, although the SEC can still act on fraudulent activities and market emergencies, the shutdown is expected to cause routine work delays.
“It’s akin to a rain delay,” commented Bloomberg’s senior ETF analyst Eric Balchunas last week.
Despite the expected slowdown, Grayscale Investments — the second-largest US crypto ETF provider, after BlackRock — launched the first US-listed spot crypto ETPs that enable staking on Monday.
The new staking-focused products, Grayscale Ethereum Mini Trust ETF (ETH) and Grayscale Ethereum Trust ETF (ETHE), now provide investors with additional staking rewards, complementing the gains from the funds’ market performance.
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