Cryptocurrency investment products recorded their highest-ever inflows last week, as the US government shutdown fueled a rally in spot crypto markets.
Global crypto exchange-traded products (ETPs) recorded $5.95 billion of inflows in the week ending Friday — the largest ever seen — CoinShares reported on Monday.
“We believe this was due to a delayed response to the FOMC [Federal Open Market Committee] interest rate cut, compounded by very weak employment data […], and concerns over US government stability following the shutdown,” CoinShares’ head of research, James Butterfill, said.
The record inflows came amid an overall bullish trend in crypto markets, which led to Bitcoin (BTC) registering a new historic high above $125,000 on Saturday.
Bitcoin ETPs break records
With inflows reaching $5.95 billion, crypto ETPs surpassed the previous $4.4 billion record from mid-July by 35%.
Unlike the previous record inflows, which were almost equally distributed between Bitcoin and Ether (ETH), the latest gains were heavily dominated by BTC, with Bitcoin funds attracting a record-breaking $3.6 billion.
“Despite prices closing in on all-time highs during the week, investors did not choose to buy short investment products,” CoinShares Butterfill noted.
Ether ETPs saw inflows totaling $1.48 billion, pushing year-to-date inflows to another record of $13.7 billion, which was close to triple that of last year, Butterfill said.
Solana (SOL) ETP inflows ranked third at $706.5 million, while XRP (XRP) added $219.4 million, with both setting records, according to CoinShares.
Related: Companies spent $1.2B on Bitcoin last week, but BTC ETFs stole the show
In line with the new record for inflows, total assets under management (AUM) in crypto funds surged past $250 billion for the first time, reaching a new high of $254.4 billion.
New ETF launches despite shutdown-triggered delay concerns
Crypto ETPs’ historic inflow records came amid the US Securities and Exchange Commission (SEC) shutting down operations last week, sparking concerns over potential delays of highly anticipated exchange-traded fund (ETF) approvals this October.
According to Crypto in America’s Eleanor Terrett, the SEC can still act on fraud and market emergencies, but the shutdown is widely expected to introduce routine work delays.
“It’s like a rain delay,” Bloomberg’s senior ETF analyst Eric Balchunas said last week.
Despite the anticipated slowdown, Grayscale Investments — the second-largest US crypto ETF provider, after BlackRock — debuted the first US-listed spot crypto ETPs, enabling staking, on Monday.
The new staking-focused products, Grayscale Ethereum Mini Trust ETF (ETH) and Grayscale Ethereum Trust ETF (ETHE), now allow investors to receive additional staking rewards, in addition to gains on the funds’ market performance.
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