The digital asset market has undergone a remarkable transformation in the last two weeks, rebounding from a significant outflow to witness a substantial inflow, largely fueled by investments in Bitcoin (BTC). The market’s dynamics have shifted, with Bitcoin leading the charge and propelling the total value of global digital assets to reach $53 billion.
In the closing week of January, the digital asset sector experienced an influx of $708 million, with the United States accounting for the lion’s share of $703 million. This represents a dramatic reversal from the previous week’s outflow of nearly $500 million. Bitcoin emerged as the predominant beneficiary, capturing 99% of the market inflows, which amounted to $703 million.
Globally, exchange-traded products (ETPs) saw inflows totaling $8.2 billion, albeit a slight decrease from the prior week’s $10.6 billion. The U.S. market’s enthusiasm for BTC spot exchange-traded funds (ETFs) was evident, attracting $1.7 billion in investments. Despite a minor reduction from the weekly average since their introduction, these ETFs indicate a positive momentum in the market, with a notable decrease in outflows from existing issuers.
The period saw the Grayscale Bitcoin Trust (GBTC) and ProShares adjusting their BTC holdings, with sales amounting to $926.7 million and $108.9 million, respectively. However, these movements were balanced by iShares and Fidelity ETFs, which added a combined $1.6 billion to their portfolios, showcasing the dynamic nature of the market.
Bitcoin’s trading price experienced pressure, partly due to signals from the U.S. Federal Reserve regarding the continuation of high interest rates. Despite this, the Solana blockchain outperformed its peers, attracting $13 million in investments, while Ethereum saw an outflow of $6.4 million.
Internationally, Canada and Sweden recorded the highest national outflows, with Canada experiencing a significant reversal in its previous trend. Conversely, Switzerland showcased a remarkable recovery, turning a substantial outflow into a noteworthy inflow within a week.