Crypto funds see highest weekly inflows since December

Inflows into cryptocurrency investment funds surged last week, fueling cautious optimism that investors are expanding exposure to digital assets despite geopolitical uncertainty and tightening monetary policy by central banks.

Cumulative inflows into digital asset investment products were $127 million in the week ended March 6, according to CoinShares. A CoinShares representative told Cointelegraph that this is the highest weekly inflow since Dec. 12, 2021. The increase was also significantly higher than the $36 million inflows seen in the previous week.

As in previous weeks, bitcoin products set a record for weekly inflows of $95 million. Bitcoin inflows have increased for seven consecutive weeks. Ethereum funds saw total inflows of $25 million last week, the highest level in 13 weeks. Inflows into multi-asset investment products also rose by $8.6 million.

So far this year, bitcoin funds have seen cumulative inflows of $166 million.

Institutions are bullish on Bitcoin!

The amount of Bitcoin held by listed companies has taken a sizable market share from holdings in spot ETFs.

— Cointelegraph (@Cointelegraph) January 3, 2022

Since the outbreak of the new crown epidemic, the crypto market has shown a higher correlation with the stock market, which means that in recent months, digital assets have been negatively affected by traditional finance's shift to a more safe-haven environment. The shift has been driven in large part by the Fed's plan to begin normalizing monetary policy. Recent events in Ukraine have also negatively impacted demand for high-risk investments, including cryptocurrencies.

Bitcoin is trading below its 11-year trend - it has only been in this region 12.7% of the time in its history Source: Pantera Capital

However, crypto hedge fund Pantera Capital said the correlation between stocks and cryptocurrencies was "short-lived." As the company’s CEO Dan Morehead noted, since 2010, the correlation between Bitcoin and the S&P 500 has typically spiked within two months before decoupling. Morehead noted that the S&P 500 has seen six downtrends during that period.

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