What to Know
Digital asset ETPs recorded $1.07B inflows, reversing four weeks of losses boosted by rate-cut optimism.
Bitcoin, Ethereum and XRP led with $464M, $309M and a record $289M inflows, even as prices fell.
The US dominated with $994M inflows, while Germany saw major outflows.
Digital asset ETPs made a strong comeback last week, bringing in $1.07 billion after four weeks of heavy outflows. The change in mood comes as investors become more sure that the US Federal Reserve will lower interest rates soon. Hints from FOMC member John Williams, who said that current monetary policy is still “restrictive,” helped raise hopes that the rate would go down this month.
Even though people were feeling more hopeful, according to a CoinShares report crypto market itself saw big price drops because of liquidations, technical problems, and uncertainty in the economy as a whole.
US Leads With Nearly $1B in Inflows
Even though trading slowed down during Thanksgiving, the US still brought in the most money, with $994 million, which was almost the whole world’s total. Canada ($97.6 million), Switzerland ($23.6 million), Brazil, and Australia were some of the other countries that saw significant inflows. But Germany stood out for all the wrong reasons. Last week, $57.5 million left the country, which means that investors there kept taking money out.
The amount of trading in digital asset ETPs dropped to $24 billion, which is almost half of the previous week’s record-setting $56 billion. Fidelity ($230M) and Volatility Shares ($160M) saw a lot of money come in, while Grayscale continued to lose money this month.
Bitcoin Leads the Turnaround
Bitcoin (BTC) saw inflows of US$464 million. Investors poured money back into Bitcoin ETPs after weeks of selling. There were $1.9 million in outflows from short Bitcoin ETPs, which means that traders are getting out of bearish positions. Even so, the price of Bitcoin fell sharply. The drop was caused by more than $540 million in long liquidations, a failed attempt to break the $93,000 resistance, and more uncertainty around the world. The rise in Japan’s bond yields and changing bets on rate cuts put more pressure on the situation.
The move happened when Bitcoin was already weak because it had just failed to break through the $93,000 resistance level. When the price fell below the $87,000 support zone, automated trading systems caused more sell-offs and long-position liquidations, which made the fall worse. In November, spot Bitcoin ETFs lost $3.48 billion, their worst month since February.
Ethereum Shows Strong ETP Inflows
Ethereum (ETH) saw inflows of $309 million. Ethereum saw one of its strongest weeks in months in terms of ETP inflows, helped by a return in investor confidence ahead of expected US monetary easing. But the price dropped faster than Bitcoin’s.ETH fell after $564 million in long positions were liquidated, and the price broke below the key $2,900 support level. Thin weekend liquidity made the move even worse.
At the same time, ETH ETFs lost $1.42 billion in November, which made institutions less likely to invest. Ethereum is currently facing resistance at $2,963, and the next major support level is around $2,760.
XRP ETP Inflows Surge
Ripple saw record-high inflows of $289 million. XRP ETPs had its biggest weekly inflow ever, continuing a six-week streak that now equals 29% of their total assets under management. Analysts say this surge is likely linked to the recent XRP ETF launches in the US.
But the token did not escape the broader market crash. XRP slipped below the US$2.10 support level, futures open interest collapsed 59% since October, and momentum indicators continue to point downward.
While major assets surged, some altcoins saw money leave, like Cardano (ADA): –$19.3M (23% of its AUM wiped out), Litecoin (LTC): –$0.9M, Solana and multi-asset products saw small inflows but nothing close to the majors.
Final Thoughts
Even though crypto prices are going down, institutional interest is coming back. Investors seem to be getting ready for a possible US interest rate cut, which could increase demand for riskier assets, especially crypto ETPs. But the huge sell-offs and technical problems in the market also show how unstable prices still are.
If the Federal Reserve says it will ease soon, more money could flow in even faster. Even though prices haven’t changed yet, the ETP market has shown its strongest sign of confidence in over a month.
Also Read: Binance Attracts $7.5 Billion Whale Inflow in New Yearly High
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