Following last week’s macro-driven outflows, investors came back strongly amid Fed easing and political uncertainty, driving crypto inflows close to the $6 billion mark.
The looming US government shutdown, along with other macro concerns, rekindled investor interest in risk-on assets in light of fiat uncertainty.
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Crypto Inflows Reached $5.9 Billion Last Week
The latest CoinShares report reveals that digital asset investment products saw a significant turnaround last week, boasting record inflows of $5.95 billion.
This surge follows a notable $812 million outflow the week prior, illustrating the quick change in sentiment.
James Butterfill, head of research at CoinShares, indicated that investors responded to disappointing US employment data, a recent Fed rate cut, and rising concerns about US government stability after the shutdown.
This rebound marks the highest weekly inflow on record for digital assets, bringing total assets under management (AuM) to an unprecedented $254 billion.
Butterfill characterized the movement as a delayed reaction to the FOMC’s dovish pivot, compounded by weaker economic indicators and a decline in confidence in US fiscal governance.
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“Investors seem to be rotating back into digital assets as a hedge against policy uncertainty,” the report noted.
Bitcoin and Ethereum Lead the Charge As Sentiment Shifts From Panic to Positioning
Just a week ago, digital asset products faced their sharpest decline in months, with $812 million in outflows, primarily from Bitcoin ($719 million) and Ethereum ($409 million), as stronger-than-expected macro data briefly revived fears of a more hawkish Federal Reserve.
At that time, US-based investors executed over $1 billion in withdrawals, indicating widespread caution. This caution has now definitively turned into optimism. The US led last week’s inflows with a record $5.0 billion, while Switzerland ($563 million) and Germany ($312 million) also achieved historic highs.
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The CoinShares executive credits the rebound to diminishing inflation fears, dovish rate expectations, and a political risk premium associated with the government shutdown. Together, these factors have reignited interest in alternative, non-sovereign assets like Bitcoin.
Bitcoin attracted $3.55 billion in inflows, marking its largest on record, as prices approached all-time highs. Despite these gains, investors notably shunned short-Bitcoin products, suggesting strong conviction that the rally might continue.
Ethereum had an outstanding week as well, garnering $1.48 billion, increasing its year-to-date (YTD) inflows to $13.7 billion, nearly tripling its 2024 total.
Solana continuously proved its status as a key institutional favorite, amassing $706.5 million, another record weekly total that raised its YTD figure to $2.58 billion.
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XRP followed with $219.4 million, indicating a renewed appetite for certain large-cap altcoins, even as smaller tokens saw minimal interest.
The transition from a billion-dollar outflow to a near $6 billion inflow in just two weeks underscores the crypto market’s heightened sensitivity to macroeconomic and political signals.
With the US government shutdown raising doubts about fiscal management and the Fed suggesting a more accommodating stance, digital assets seem to be reaffirming their role as risk-on investments and macro hedges.
CoinShares posits that institutional capital may remain robust if the current momentum continues, especially as investors seek yield and diversification in the midst of volatile traditional markets.
