The cryptocurrency market has seen $17.8 billion in capital inflows, and investor confidence is growing day by day

This year has been a big one for the cryptocurrency market, with capital inflows reaching a total of $17.8 billion so far, a figure that has surpassed the 2021 peak. Especially last week, the market witnessed significant inflows of $1.44 billion. Meanwhile, Bitcoin has been the main driver of the market, with weekly inflows as high as $1.35 billion. This surge was mainly due to the German government’s sales of Bitcoin and the positive impact of US Consumer Price Index (CPI) data.

However, the decline in market participation shows investor caution, but as the cryptocurrency market gradually recovers, investor confidence is expected to be strengthened. Currently, the price of Bitcoin is stable at around $64,500, which brings positive signals to the entire market and promotes a nearly 9% increase in the global cryptocurrency market value. Altcoins have also gained momentum from Bitcoin's strong performance, showing overall positive momentum in the market.

Crypto market capital inflows exceed $17.8 billion

Against the background of the gradual recovery of the global cryptocurrency market, recent capital inflows have left behind the highest record in 2021, reaching a staggering $17.8 billion. The U.S. market dominated the market with $1.3 billion in inflows, reflecting the country’s strong investment interest in crypto assets.

Furthermore, cryptocurrency optimism also crosses borders, with Switzerland, Hong Kong, and Canada reporting inflows of $58 million, $55 million, and $24 million respectively, demonstrating widespread global investor interest in cryptocurrencies.

The CoinShares report specifically noted that Bitcoin’s single-week inflows reached $1.35 billion, which is the fifth-highest figure in history. James Butterfill analyzed that the German government’s sale of Bitcoin caused short-term supply pressure in the market and provided investors with the opportunity to buy at low prices. Meanwhile, positive results from U.S. CPI data also boosted market sentiment, prompting investors to increase their cryptocurrency positions.

Butterfill said: “The combination of the German government’s Bitcoin sales and the positive US CPI data provide investors with a good opportunity to increase their holdings.”

Ethereum and other cryptocurrency inflows

Meanwhile, Ethereum also witnessed $72 million in inflows, its largest weekly positive inflow since March. As market expectations for the Ethereum spot ETF continue to grow, investor interest continues to grow. The survey shows that U.S. investors have shown strong interest in such Ethereum-based investment products, indicating strong market demand for these products in the future.

Thomas Perfumo, head of strategy at Kraken, is optimistic about the market potential for Ethereum (ETH)-based investment products, predicting that the launch of these products will significantly boost inflows, which are expected to reach $750 million to $1 billion per month. Perfumo believes that this expected monthly inflow will have a significant positive impact on the entire cryptocurrency industry.

He pointed out: “The market generally expects that the launch of Ethereum ETF products will bring in monthly capital inflows of approximately US$750 million to US$1 billion, which will greatly support industry development.”

In addition to Ethereum, other cryptocurrencies have also ushered in the spring of funds. Solana, Avalanche, and Chainlink recorded inflows of $4.4 million, $2 million, and $1.3 million respectively. These positive fund flows provide a solid foundation for the market's recovery.

However, despite the positive inflows, the CoinShares report also reminds us that current trading volume is relatively low at just $8.9 billion, well below this year’s seven-day average of $21 billion. This phenomenon may indicate that market participants have maintained a certain degree of caution and lacked sufficient confidence at the current stage. This caution may stem from concerns about market volatility or uncertainty about the future direction of the cryptocurrency market.

Exchange investors are cautious

Recently, trading data from exchanges have been sluggish, showing a clear trend of caution. Although the trading volume last week was not satisfactory, this phenomenon may be due to the cautious attitude of investors, a trend that has begun to appear since June.

According to data compiled by the WuBlockchain team, market participation has decreased, reflecting that the confidence of market participants may not have been fully restored.

The view is that this hesitation among investors may be a natural response to uncertainty about the future direction of the market.

Conclusion:

The inflow of funds into the cryptocurrency market this year not only broke historical records, but also symbolized the arrival of a new financial era. Behind this phenomenon is the re-evaluation and vote of confidence of global investors in decentralized assets.

While the temporary decline in market participation may reflect short-term investor caution, over the long term, this volatility is part of how markets mature and self-regulate.

As the market structure continues to improve and the regulatory environment gradually becomes clearer, cryptocurrencies are expected to become an integral part of investment portfolios, providing investors with new ways to diversify and spread risks.

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