Cryptocurrency inflows surged to $3.4 billion last week, marking a significant reversal from three weeks of negative flows. Bitcoin investments predominantly drove this increase, amidst concerns over tariffs and the weakening US dollar. XRP shows promise with potential ETF approvals, hinting at broader appeal for cryptocurrencies as safe havens. Political pressures on the Federal Reserve complicate the economic landscape further.
In a remarkable turn of events, cryptocurrency inflows surged to $3.4 billion last week, marking one of the highest figures ever recorded. This shift comes after three consecutive weeks of negative flows, during which investors had withdrawn substantial amounts from the market. The latest CoinShares report highlights that just one week prior, crypto outflows totalled $146 million, following two weeks of withdrawals of $795 million and $240 million, respectively.
James Butterfill, Head of Research at CoinShares, celebrated this significant inflow as a record, attributing it mainly to rising concerns over tariffs affecting corporate profits, along with the weak US dollar. Butterfill remarked, “We believe the concern over tariff impacts and the dramatic weakening of the US dollar are key reasons for the movement towards digital assets.” Notably, besides Bitcoin, which dominates the market, other cryptocurrencies are also beginning to be perceived as a potential safe haven.
Data reveals that Bitcoin investment products enjoyed the lion’s share of the inflows, attracting $3.188 billion alone. Interestingly, XRP has shown impressive performance, bucking the negative trend observed across many altcoins last week. The optimism around XRP is largely linked to the anticipated approval of ProShares’ XRP futures ETF, which analysts suggest might pave the way for a future spot XRP ETF that could draw in $100 billion to Ripple’s token, according to BeInCrypto reports.
Armando Pantoja, an analyst, voiced excitement about this prospective market shift, stating that a spot XRP ETF could unlock extensive demand, potentially sending prices to new heights. The growing sentiment regarding XRP reflects a broader trend in how investors view cryptocurrency within the financial landscape.
Amidst this backdrop of optimism, CoinShares also delves into the complications arising from tariffs on corporate earnings and how these dynamics are influencing the US dollar. Presently, political pressures on the Federal Reserve (Fed) from figures like President Trump, who is urging rate cuts, intersect with the Fed’s cautious stance. Their recent decisions indicate a tightening grip on monetary policy amidst lingering inflation and a slower predicted growth rate leading into 2025.
The chaotic economic climate is wrought with questions about the government’s role in the economy and the Fed’s effectiveness. The dollar has suffered, particularly against the backdrop of Trump’s criticisms of Fed chair Jerome Powell, leading to a notable decline in the DXY (dollar index). In this environment, analysts are viewing Bitcoin increasingly as a hedge against economic instability. Interestingly, Bitcoin has outperformed the Nasdaq-100 by 4.5% since the announcement of new tariffs.
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