The more it falls, the more it buys? Crypto funds saw a net inflow of $274 million last week, the highest level since the end of 2021

According to the weekly fund report released by CoinShares, the net inflow of crypto funds reached US$274 million last week, the highest level since the end of 2021. Analysts said this suggests a strong signal that investors see the decoupling of the UST stablecoin and the widespread sell-off it caused as a buying opportunity.

Data from the Bitpush terminal showed that last week Bitcoin fell below $35,000 for the first time since July 2021, falling to a low of $26,350.49 amid market volatility caused by bearish sentiment and the depegging of the TerraUSD (UST) algorithmic stablecoin.

"This was the largest week of net inflows since October 2021 and the 19th largest week of net inflows since records began in 2015," said James Butterfill, head of research at CoinShares .

In terms of regional distribution, investors were polarized, with crypto funds listed in North America receiving inflows of $312 million and European funds seeing outflows of $32 million.

Bitcoin funds were the main beneficiaries, with inflows totaling $299 million last week, a sign that investors are flocking to the relative safety of digital assets. Investment products that short Bitcoin saw inflows of $700,000 last week, a slowdown from previous weeks.

Grayscale remains the largest provider of all crypto ETFs tracked by CoinShares, with total assets under management of about $26 billion, according to CoinShares.

Canadian ETF provider Purpose's crypto investment products saw inflows of $284 million last week, surpassing other competitors such as 3iQ and 21Shares .

Ethereum investment products continued to see outflows totaling $27 million last week, bringing year-to-date outflows to $236 million, or 2.6% of total AUM. In contrast, Solana investment products have seen inflows of $103 million this year.

“This may be related to the Ethereum consolidation,” Butterfill wrote in the report. “Interestingly, Solana has seen a large inflow of funds year-to-date, contrary to Ethereum, which suggests that Solana is more favored by investors than Ethereum.”

Inflows into multi-asset investment products totaled $8.6 million, indicating that investors viewed diversified investments as an opportunity to buy into recent price weakness.

Blockchain stock investors panicked and sold off, with total outflows of $51 million last week, the third-largest outflow on record.