Crypto ETPs See $1 Billion Inflows, Ending Four-Week Outflow Trend

TLDR

• Crypto ETPs saw $1.07 billion in inflows last week, ending a month-long trend of withdrawals.
• Bitcoin led the inflows with $464 million, followed by Ether and XRP with $309 million and $289 million, respectively.
• The inflows indicate a shift in investor sentiment, driven by improving U.S. monetary policy expectations.
• XRP experienced a surge in investment, attracting $790 million in inflows this month, boosted by new U.S. ETFs.
• U.S. investors accounted for nearly all of the $1 billion in inflows, highlighting renewed interest in the market.
• Despite recent volatility, last week’s inflows marked the first positive week for crypto ETPs since late October.

Crypto exchange-traded products (ETPs) experienced a significant reversal last week, marking the first positive week in a month. Inflows of approximately $1 billion ended a four-week streak of withdrawals that had totaled $5.5 billion. This shift indicates a potential improvement in market sentiment after weeks of consistent outflows.

Bitcoin Leads Inflows as Crypto ETPs Gain Momentum

The $1.07 billion inflow into crypto ETPs last week came as a relief for many investors. The market had faced heavy losses throughout November, but the recent influx has sparked optimism. Bitcoin attracted the largest share of the inflow, drawing $464 million into ETP products.

Bitcoin’s recovery follows a tough month, where it recorded $2.8 billion in outflows. Despite this, the coin’s price briefly surpassed $90,000 last week before pulling back. Analysts believe that improving U.S. monetary policy expectations fueled this renewed interest in crypto ETPs.

Ether also experienced substantial inflows last week, with $309 million moving into ETPs. Although Ether remains in negative territory for November, the recent inflows signal renewed interest in the asset. XRP also attracted significant inflows, amounting to $289 million last week.

XRP Surge Amid ETF Launches Drives Investor Interest

XRP’s performance in crypto ETPs stood out, with a strong $790 million in inflows this month. This surge is largely attributed to new exchange-traded fund (ETF) products launched in the U.S., such as Canary Capital’s XRP ETF. The launch of these funds has helped attract institutional investors to XRP-related ETPs.

CoinShares noted that U.S.-based funds were the driving force behind the $1 billion inflows last week. The United States alone accounted for nearly $1 billion of the total volume. This indicates a clear shift in investor sentiment, particularly in American markets.

The recent inflows come despite overall low trading volumes during the Thanksgiving holiday period. This suggests that investors are willing to re-engage with crypto ETPs, even during seasonal slowdowns. The return to inflows aligns with a brief rally in major cryptocurrencies, including Bitcoin and Ether.

Investors Focus on U.S. Federal Reserve Policy Signals

The reversal in crypto ETP inflows is attributed to a shift in U.S. monetary policy expectations. James Butterfill, Head of Research at CoinShares, linked the inflows to recent comments from Federal Open Market Committee (FOMC) member John Williams. Williams described current monetary policy as restrictive, which many saw as a signal of potential rate cuts.

The prospect of lower interest rates tends to boost risk-sensitive assets like cryptocurrencies. With tighter financial conditions weighing on digital assets in recent months, this change in sentiment has rekindled interest in crypto ETPs. Investors are now closely watching for further policy signals that could impact liquidity and market stability.

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