Renewed Crypto Investment Inflows Swayed by Market Volatility

Crypto Investment Sees Renewed Inflows Amid Market Volatility and Global Trade Tensions

After a turbulent stretch marked by historic outflows, global crypto investment products are slowly finding their footing again. According to the latest data from digital asset manager CoinShares, last week witnessed a $226 million influx into crypto funds, marking the second week in a row of positive momentum for this often unpredictable market. The renewed confidence reflects what CoinShares’ Head of Research James Butterfill describes as “a positive but cautious investor base.”

Butterfill emphasized how this shift in sentiment has been taking shape. “Following the largest outflows on record, ETPs have seen nine consecutive trading days of inflows,” he noted in Monday’s report. Yet, investor behavior remains highly sensitive to macroeconomic cues. For instance, despite the overall upbeat inflow trend, last Friday bucked the pattern, showing $74 million in outflows. Analysts trace this to the U.S. core personal consumption expenditure data exceeding expectations—an economic signal that could prompt the Federal Reserve to extend its hawkish monetary stance. That possibility, according to Butterfill, casts a cloud over the outlook, especially at a time when weak growth metrics had suggested the opposite just weeks ago.

The inflows themselves, however, correlate strongly with cryptocurrency price movements witnessed earlier in the week. But optimism faded swiftly on Friday, when much of the week’s gains evaporated amidst growing geopolitical anxiety. President Trump’s abrupt announcement of new tariff measures—including a 25% levy on goods from Mexico and Canada set to take effect April 2—rekindled fears of a trade war. According to Ryan Lee, Chief Analyst at Bitget Research, “Historically, such protectionist measures trigger risk aversion across asset classes, and crypto has not been immune.”

Lee went on to explain how digital assets remain tightly intertwined with traditional equity markets. “The timing proves particularly delicate as digital assets maintain elevated correlation with traditional markets; bitcoin’s 0.67 correlation coefficient with the Nasdaq suggests equities weakness could continue dragging crypto prices lower,” he added. That entanglement became evident last week as Bitcoin (BTC) experienced a 6% drop. Meanwhile, the GMCI 30 index—which tracks leading cryptocurrencies—fell by a steeper 10.6%, pulling down the total assets under management in Bitcoin investment products to $114 billion. This marks the lowest level since the U.S. presidential election in November, underscoring the fragility of the current recovery.

U.S. Leads Bitcoin Inflows as Altcoins Stage a Modest Comeback

Zooming in on regional trends, the United States remained the dominant player in these inflows, accounting for a significant $204 million of the total. Notably, this isn’t an isolated trend. Investment products based in Switzerland and Germany also posted gains, drawing $14.7 million and $9.2 million respectively. On the flip side, markets in Hong Kong and Brazil recorded slight outflows, suggesting that global investor sentiment remains fragmented and reactive to regional developments.

The lion’s share of investor attention continues to center on Bitcoin. Funds tied to the world’s largest cryptocurrency attracted $195 million in net inflows last week alone. Meanwhile, the appetite for short-Bitcoin positions continued to fade for a fourth consecutive week, with outflows tallying up to $2.5 million. This shift in positioning may reflect growing confidence—or at least reduced skepticism—about Bitcoin’s resilience amid broader market jitters.

A more granular look at the U.S. reveals that spot Bitcoin exchange-traded funds (ETFs) played a particularly crucial role. These funds were responsible for $196.4 million of the net inflows, managing to post positive flows every single trading day last week except Friday. Their performance serves not only as a bellwether for retail and institutional interest but also as a benchmark for market stability amid volatility.

Interestingly, the week also brought a modest but meaningful reversal in fortune for altcoins. For the first time in five weeks, global altcoin-focused investment products registered net inflows, signaling a subtle shift in investor priorities. Collectively, altcoin funds added $33 million—a welcome turnaround after four preceding weeks hemorrhaging $1.7 billion in outflows. Among the alternative cryptocurrencies, Ethereum and Solana led the charge, pulling in $14.5 million and $7.8 million, respectively. Other key beneficiaries included XRP with $4.8 million and Sui-based funds, which logged $4 million in new investment.

Taken together, these numbers paint a nuanced picture: crypto markets are gradually regaining momentum, though not without hesitation. Mounting trade tensions, macroeconomic ambiguity, and high correlations with traditional financial systems continue to cloud the trajectory. Yet, the resurgence of inflows—especially across both Bitcoin and altcoin products—signals a reawakened interest in digital assets, albeit one that remains extremely responsive to market catalysts.