The past week has proven to be exceptional for crypto investments. This is according to the latest weekly digital asset funds flow report from CoinShares. According to the platform, digital assets recorded inflows of $76 million last week.
This marks a fourth consecutive week of inflows, which now stand at $230 million year-to-date. This phenomenon underscores a decisive change in investor sentiment for the start of 2023. The report adds that total investment assets under management (AuM) have now increased by 39% since the start of the year. to hit $30.3 billion, the highest since mid-August 2022.
These significant investment flows into the crypto space come as the market is showing impressive gains for the year. Both Bitcoin and Ethereum are up around 40% year-to-date due to a combination of factors including 1) macro expectations that the FED won’t need to tighten too much in 2023, 2) the fact that the pessimism following the collapse of FTX was overdone given that crypto fundamentals remain strong and 3) the growing number of on-chain and technical signals indicating that the 2022 bear market is likely over.
Ethereum struggles to attract investors
Bitcoin continues to grab the attention of investors as inflows for BTC accounted for 90% of inflows last week. Short-term Bitcoin investment products accounted for the rest of the inflows. “Despite positive developments around staking, Ethereum only saw $0.7 million in inflows,” CoinShares noted.
Ethereum’s struggles to attract investment flows may come as a surprise, given 1) the network’s strong fundamentals and 2) the upcoming Shanghai hard fork. With regard to the first point, a recent report by Bernstein observed that the Ethereum network has seen an improvement in on-chain activity lately, with an uptick in non-fungible token (NFT) activity following the launch of a mini-game by Yuga Labs.
According to Bernstein, the cumulative daily fees accrued on the Ethereum network have, as a result, more than doubled to around $4-6 million per day, from nearly $2 million at the start of the year. Indeed, according to cryptofees.infoEthereum’s average daily fee over the past seven days was around $4.88 million, up from around $2.9 million last month at this time.
Higher fees are a sign of increased use of the Ethereum blockchain, which may also ensure that the inflation rate remains negative for the foreseeable future, Bernstein said, pointing out that ETH supply is in deflation. for over two weeks now. According to data from Glassnodethe annualized net rate of change of Ethereum supply was last seen around -0.7%.
Prior to the September 2022 “merger”, which saw the Ethereum network move from a proof-of-work consensus mechanism to a proof-of-stake mechanism, ETH’s inflation rate was above 4%. Many analysts believe that the deflationary nature of ETH could significantly support price appreciation in the coming years.
In the immediate term, the Shanghai upgrade will be a big catalyst for Ethereum, as staking ETH can finally be withdrawn. Bernstein warned that there might be some caution heading into the event, given fears that unstaked ETH could flood the market and add to selling pressure.
Follow our affiliate links:
- To buy cryptocurrencies in the SEPA Zone, Europe and French citizensvisit Coinhouse
- To buy cryptocurrency in Canada visit bitbuy
- To secure or store your cryptocurrenciesget a Ledger wallet
- To trade your cryptos anonymouslyinstall the NordVPN app
To accumulate coins while playing:
- In poker on the CoinPoker gaming platform
- To a global fantasy football on the Sorare platform
Stay informed through our social networks: