Crypto assets saw a surge in investment inflows, with $151 million invested in the first week of 2024. This includes a notable shift in sentiment towards Ethereum and varied performances among altcoins. Despite recent outflows, Bitcoin is rebounding with a 5.2% increase, whereas Ethereum is showing signs of recovery after a 2% decline.
Our analysis of the situation
The first week of 2024 has brought thrilling twists and exciting trends in the realm of crypto asset investments. Witnessing a surge of $151 million in inflows, this sector has showcased its resilience amid ongoing legal battles and market fluctuations.
James Butterfill, Head of Research at CoinShares, underlines the significance of this surge, especially against the backdrop of the Grayscale vs. US SEC lawsuit. These funds have added up to a total of $2.3 billion since the case commenced in October 2022, representing a remarkable 4.4% of the firm’s overall managed assets.
Contrary to expectations, the absence of a spot ETF launch in the US did not deter investment inflows. American exchanges took the lead, contributing 55% to the surge, followed by German and Swiss exchanges at 21% and 17%, respectively.
Bitcoin unquestionably stole the show, reeling in an impressive $113 million in investment inflows, equivalent to 3.2% of the total assets under management over the past nine weeks. In a surprising turn, the anticipation of the US SEC approval for a spot Bitcoin ETF did not align with the traditional “buy the rumor, sell the news” pattern. Far from it, as outflows from short Bitcoin ETPs amounted to $7 million, challenging the expected price decline.
Ethereum, standing as the second-largest crypto by market cap, attracted inflows of $29 million, signaling a noteworthy shift in investor sentiment. Meanwhile, while Solana faced outflows, Cardano, Avalanche, and Litecoin saw positive inflows, marking a mixed bag of sentiments in the altcoin arena.
Although Bitcoin experienced a net outflow, the recent $113 million surge has indicated a resilient rebound, accompanied by a 5.2% surge in the past week and a promising 1.1% uptick in the first 24 hours. On the flip side, Ethereum and several altcoins, including Solana, Cardano, Avalanche, and Litecoin, encountered losses, painting a varied picture of the crypto landscape.
In a market replete with unforeseen movements and counterintuitive trends, the dynamism and unpredictability of crypto asset investments continue to capture the imagination of both enthusiasts and seasoned investors.
[Featured image: iStock, Chart: TradingView]
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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