Last week, Crypto products saw a major inflow of up to $2.2 billion from institutional investors. The latest U.S. Election, on Nov. 5, still stimulated the weekly cryptocurrency inflow up to $2.2 billion. The number increased 15% from the previous week by about $1.98 billion. According to Coin Shares’s release, on Nov. 18, digital asset big Crypto product inflow recorded $33.5 billion year-to-date. It hit a new peak of under-asset management (AUM) up to $138 billion.
Bitcoin (BTC) saw the largest inflow based on assets last week, around $1.48 billion, or 67%. It was followed by Ethereum (ETH) and Solana (SOL), with inflows of $646 million and $23.9 million, respectively. Justin Drake’s Beam Chain network upgrade proposal increased Ethereum’s inflow from $157 million. Only multi-asset and Binance Coin (BNB) recorded a week’s outflow.
BlackRock’s iShares Bitcoin Trust ETF (IBIT) recorded the highest surge in Crypto products from last week’s inflow, up to 63% or up to $2.1 billion. The rest of the funding, including Grayscale and Fidelity, recorded an outflow ranging from $8 million to $153 million.
Bitcoin as an Inflation Hedge in 2024
Bitcoin’s status as an inflation hedge is still solid in 2024, particularly in light of the persistent economic uncertainties. Inflation rates have increased due to the strong monetary policies implemented by central banks worldwide in recent years, such as printing money to bolster economies during the pandemic.
As a result, Bitcoin is becoming a more popular alternative store of wealth among investors. Unlike conventional currencies, Bitcoin is not subject to inflationary pressures brought on by excessive money creation because its supply is limited to 21 million coins.
Given that Bitcoin can protect capital during periods of rising consumer prices, institutional investors like MicroStrategy and Tesla have continued to grow their cryptocurrency holdings. In 2024, Bitcoin’s success during inflationary times and its increasing popularity among.
The general public solidified its status as “digital gold.” Despite its volatility, Bitcoin’s deflationary characteristics are thought to provide long-term inflation protection, strengthening its position in institutional portfolios.
Crypto Product driving factor
James Butterfill, Coin Shares’ head of research, says a combination of looser monetary policy and a Republican winning a majority of the Congress and Presidency appears to be a driving factor of these inflows. Donald Trump’s second term in the White House still brings a positive rally for the cryptocurrency industry and crypto products. Butterfield has mentioned that Trump’s presidency would bring crypto-friendly regulations and fiscal policy.
Earlier, Trump picked several names for his cabinet secretary who identified as pro-crypto personalities, including Elon Musk, Tom Emmer, and Robert F. Kennedy Jr. The Bitcoin Act, proposed by Republican Senator Cynthia Lummis, and the Bitcoin Strategic Reserve also boosted crypto investors’ confidence. He also mentioned that this favourable outlook might bring Bitcoin the best potential in the future.
In Summary
The record $2.2 billion inflow into the Crypto product sector in 2024 heralds a new age of institutional participation and acceptance. As their confidence grows, institutional investors progressively incorporate digital assets into their portfolios as a store of value, a diversification tool, and an inflation hedge.
Even while there are still obstacles like volatility and regulatory uncertainty, the development of Ethereum and the emergence of DeFi also provide substantial growth prospects. As we approach the second half of 2024 and beyond, the cryptocurrency market is beginning a new age, where digital assets will likely become increasingly significant in the global financial system.
FAQs
Which cryptocurrencies saw the largest inflow?
Bitcoin led with $1.48 billion, followed by Ethereum ($646 million) and Solana ($23.9 million).
What impact does Bitcoin have as an inflation hedge?
Bitcoin is seen as a store of value, protecting against inflation due to its fixed supply of 21 million coins.
How did BlackRock's ETF perform in the recent inflow?
BlackRock's iShares Bitcoin Trust ETF (IBIT) saw the highest surge, receiving $2.1 billion, a 63% increase.
What factors are boosting crypto products in 2024?
Looser monetary policies and pro-crypto regulatory outlook under a potential Republican administration are driving institutional interest.
