Digital Asset ETPs Post US$1 Billion Inflows as Market Sentiment Recovers

Key Highlights

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  Digital asset ETPs experienced US$1.07 billion in inflows, reversing four weeks of significant outflows totaling US$5.7 billion.
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  Bitcoin, Ethereum, and XRP were the leading assets for inflows, with XRP achieving a record weekly gain of US$289 million.
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  U.S. investors were the primary drivers, contributing nearly US$994 million in inflows, indicating renewed confidence ahead of potential interest rate adjustments.

Inflows Surge Amidst Interest Rate Speculation

Digital asset exchange-traded products (ETPs) recorded US$1.07 billion in inflows last week. This marks a substantial turnaround following four consecutive weeks of outflows that amounted to US$5.7 billion. Investor optimism was bolstered by remarks from FOMC member John Williams, who suggested that while monetary policy remains restrictive, there is a possibility of an interest rate cut.

United States Leads Inflows Despite Lower Trading Activity

The United States was the dominant force in inflows, accounting for nearly US$994 million. Additional support came from Canada with US$97.6 million and Switzerland with US$23.6 million. Germany was one of the few countries to see outflows, totaling US$57.3 million. Overall trading volumes for digital asset ETPs decreased to US$24 billion during the Thanksgiving week, a reduction from the previous week's record US$56 billion. This decline is attributed to seasonal subdued activity rather than a weakening of investor interest.

Bitcoin, Ethereum, and XRP See Strong Investor Demand

Bitcoin attracted US$464 million in inflows as investors began to unwind earlier bearish positions. Ethereum also saw increased interest, receiving US$309 million on the back of improving sentiment. XRP achieved a record weekly inflow of US$289 million, partly due to the recent launch of U.S. ETFs; this inflow represents 29% of its total assets under management over a six-week period. In contrast, Cardano experienced US$19.3 million in outflows, which constitutes approximately 23% of its AuM, highlighting a growing selectivity among investors in the ETP market.

Market analysts interpret the surge in inflows as an indicator of renewed confidence in digital assets and an increase in institutional participation. This rebound demonstrates how closely digital asset ETPs respond to macroeconomic signals, particularly shifts in U.S. interest rate expectations. It also reinforces the leading position of major cryptocurrencies as the primary vehicles for investment. With market sentiment stabilizing, these renewed inflows may signal a period of consolidation and potential growth for digital asset investment products in the coming weeks.

Digital asset investment products also recorded their strongest weekly performance on record, attracting US$5.95 billion in inflows amidst weak U.S. employment data and renewed macroeconomic uncertainty.