Bitcoin Dominates Inflows as Ethereum Faces Outflows, Altcoins Exhibit Mixed Trends: CoinShares Weekly Report

Crypto asset fund flows experienced a shift last week with a promising influx of $48 million into digital asset investment products, according to the latest weekly report from CoinShares, a prominent European digital asset investment firm. This development comes amidst the impact of macroeconomic factors and investor sentiment on fund flows.

James Butterfill, Head of Research at CoinShares, highlighted that while nearly $1 billion flowed into digital asset products during the first half of the week, the release of new macroeconomic data and the US Federal Reserve’s minutes led to significant outflows of $940 million in the “latter half.”

Butterfill noted:

“The release of new macroeconomic data and the US Federal Reserve’s minutes — which pointed to a stronger US economy and a more hawkish Fed — led to outflows of US$940 million in the latter half. This suggests that the post-US election honeymoon is over, and macroeconomic data is once again a key driver of asset prices.”

Bitcoin Led Inflows, Ethereum Faced Outflows

The CoinShares report indicated that Bitcoin (BTC) largely drove the inflows last week with a total of $214 million. Despite being subject to outflows later in the period, Bitcoin remained the “best-performing asset” year-to-date with cumulative inflows of $799 million.

This performance reflects its continued appeal to investors seeking exposure to digital assets in the context of broader market movements. In contrast, Ethereum (ETH) faced significant pressure, recording outflows of $256 million.

According to Butterfill, this trend could be attributed to a broader sell-off in the technology sector rather than any specific issues with the Ethereum network itself.

Solana, on the other hand, stood out as a positive exception, attracting inflows of $15 million, suggesting resilience in certain altcoin sectors even during challenging market conditions.

Altcoins Showed Mixed Trends

Overall, altcoins exhibited mixed but generally positive trends despite underwhelming price performances. Aave (AAVE), Stellar (XLM), and Polkadot (DOT) saw inflows of $2.9 million, $2.7 million, and $1.6 million, respectively, indicating sustained investor interest in these projects.

This trend reflects a growing diversification in investment strategies as altcoins continue to attract niche markets and developers. XRP (XRP) recorded inflows of $41 million, which Butterfill linked to ongoing political and legal developments.

The Head of Research at CoinShares noted:

“XRP saw substantial inflows of last week and remains primarily driven by political and legal factors, with inflows suggest heightened optimism ahead of the 15th January SEC appeal deadline.”

Global Crypto Market Outlook

The global crypto market has faced notable bearish sentiment over the past week, shedding nearly $400 billion from its total market capitalization. Particularly, the valuation has dropped from $3.662 trillion last Monday to $3.283 trillion as of today.

This significant plunge in market capitalization can be mainly attributed to the continues bearishness in Bitcoin. At the time of writing, Bitcoin has now dropped below $91,000 bringing its price to trade at a price of $90,704 marking a 3.9% decrease in the past day.