Last week, digital asset investment products shed $352 million, as investors remained cautious despite a supportive backdrop of softer US payrolls and growing expectations for a September rate cut. Alongside, trading volumes tumbled 27% week-over-week, in what appears to be signs of waning short-term interest.
Even so, year-to-date inflows climbed $35.2 billion, outpacing last year’s $48.5 billion annual tally by 4.2% on an annualized basis, which, according to CoinShares, points to the broader positive sentiment being intact.
Ethereum Hit Hardest
Although market sentiment weakened and minor outflows occurred later in the week, Bitcoin still ended with strong results, as it recorded net inflows of $524 million over the week, according to the latest edition of Digital Asset Fund Flows Weekly Report.
Ethereum, however, bore the brunt of last week’s downturn in digital asset products, posting $912 million in net outflows. Withdrawals were logged every day of the seven-day trading stretch and came from a diverse range of ETP providers, which ultimately erased monthly inflows. Despite this reversal, Ethereum still holds $11.2 billion in year-to-date inflows.
On the other hand, Solana and XRP continue to post encouraging numbers. Solana has seen 21 consecutive weeks of inflows worth $1.16 billion, while XRP leads slightly with $1.22 billion. Meanwhile, Chainlink, Sui, and Cronos attracted $1 million, $0.6 million, and $0.3 million in inflows, respectively.
Multi-asset products also welcomed $4.4 million in weekly inflows.
Flows were highly polarized across regions during the week. The United States, for one, topped the outflow charts with $440 million, joined by Sweden’s $13.5 million and Switzerland’s $2.7 million. Germany countered with inflows of $85.1 million, while Hong Kong attracted $8.1 million. Smaller but positive inflows were also seen in Canada, Brazil, and Australia, which pulled in $4.1 million, $3.5 million, and $2.1 million, respectively.
Ethereum Outflows Aren’t About Fundamentals
Weighing on the pressure on Ethereum, Konstantin Anissimov, Global CEO of Currency.com, said that some of these outflows are rotations. In a statement to CryptoPotato, Anissimov added that macro anxiety amid soft labour data, recession fears push money back to Bitcoin products. The exec commented,
“To many institutions, Bitcoin still looks like the ‘safer’ digital asset when markets face turbulence. By contrast, ETH is seen as a higher-beta play. That makes it the first target when risk appetite decreases.”
Despite this, the exec does not believe that the “fundamentals behind Ethereum have cracked.” Anissimov went on to add,
“So far, staking growth, DeFi activity, and network health remain strong. From my perspective, the size of this outflow is more about timing than conviction. If ETH stabilises and macro sentiment improves, inflows can bounce back by Q4. But if uncertainty stays strong, we could be looking at a much longer pause being a stress test for ETF investors and ETH’s price resilience.”
