There were a surprising number of inflows into digital asset funds, the first time money has flowed into them in four weeks. This came despite a plunge in the price of bitcoin (BTC) and most other cryptocurrencies.
As CoinShares reported Monday, bitcoin funds saw inflows of $45 million. Due to outflows from funds targeting other cryptocurrencies, there was a total of $40.3 million in inflows across all digital asset funds.
After four consecutive weeks of outflows, this week's inflows marked a significant turnaround.
James Butterfill, head of research at CoinShares, said the positive outcome was likely due to "investors taking advantage of significant price weakness." He questioned how durable the turnaround might prove to be.
"Interestingly, we have not seen the same surge in trading activity in investment products that we have seen in the past during periods of extreme price weakness," Butterfill said. "It is too early to tell if this marks the end of four weeks of negative sentiment.
The price of bitcoin, the largest cryptocurrency by market capitalization, slipped to $35,000 by Friday after opening the week at around $38,000. The price briefly rose to $40,000 after the Federal Reserve raised interest rates by 0.5 percentage points last week.
Most crypto funds trade on weekdays when stock markets are open.
Bitcoin short funds, which profit from falling BTC prices, saw the second largest inflows of the year at $4 million, reaching $45 million in assets under management.
Funds focused on Ether (ETH) continued their losing streak, recording $12.5 million in outflows, bringing year-to-date outflows to $217 million.
Multi-asset funds saw inflows of $1.7 million, bringing the total to $150 million.
Solana's SOL was the only altcoin to see significant inflows into funds, with $1.9 million, bringing its year-to-date inflows to $107 million.
Fund flows were geographically unbalanced, as North American investment products saw inflows of $66 million, while European funds saw outflows of $26 million.
Purpose and ProShare managed funds saw inflows of $58.8 million and $19.3 million, respectively, while CoinShares XBT funds saw a loss of $18.4 million, for a total outflow of $305 million year-to-date.