Bitcoin Tops Crypto Inflows Again, But Ethereum Faces Major Setback—Here’s What Happened

The newest weekly report from CoinShares, a distinguished European digital asset investment firm, reveals notable shifts in crypto asset fund flows. The report highlights inflows of $48 million into digital asset investment products throughout the past week.

Nonetheless, the general picture appears to be more complex, reflecting the impact of macroeconomic aspects and investor sentiment on fund flows.

James Butterfill, Head of Research at CoinShares, noted that while nearly $1 billion flowed into digital asset products throughout the first half of the week, the discharge of recent macroeconomic data and the US Federal Reserve’s minutes led to significant outflows of $940 million within the “latter half.”

Butterfill wrote:

The discharge of recent macroeconomic data and the US Federal Reserve’s minutes — which pointed to a stronger US economy and a more hawkish Fed — led to outflows of US$940 million within the latter half. This implies that the post-US election honeymoon is over, and macroeconomic data is once more a key driver of asset prices.

Bitcoin Leads Inflows While Ethereum Faces Outflows

In keeping with the CoinShares report, Bitcoin maintained its dominance in fund inflows last week, attracting $214 million. Despite being subject to outflows later within the period, Bitcoin stays the “best-performing asset” year-to-date, with cumulative inflows of $799 million.

This performance highlights its continued appeal to investors in search of exposure to digital assets amid broader market fluctuations. In contrast, Ethereum faced significant pressure, recording outflows of $256 million.

Butterfill attributed this trend to a broader sell-off within the technology sector moderately than any specific issues with the Ethereum network itself. Meanwhile, Solana stood out as a positive exception, attracting inflows of $15 million, suggesting resilience in certain altcoin sectors even amidst difficult market conditions.

Overall, altcoins exhibited mixed but generally positive trends despite underwhelming price performances. Aave, Stellar, and Polkadot saw inflows of $2.9 million, $2.7 million, and $1.6 million, respectively, indicating sustained investor interest in these projects.

Global Crypto Asset Fund Flows. | Source: CoinShares

This trend reflects a growing diversification in investment strategies as altcoins proceed to draw area of interest markets and developers. XRP recorded inflows of $41 million, with Butterfill linking this activity to ongoing political and legal developments. The Head of Research at CoinShares noted:

XRP saw substantial inflows of US$41m last week and stays primarily driven by political and legal aspects, with inflows suggest heightened optimism ahead of the fifteenth January SEC appeal deadline.

Global Crypto Market Outlook

The worldwide crypto market has faced notable bearish sentiment over the past week, shedding nearly $400 million from its total market capitalization. Particularly, the valuation has dropped from $3.662 trillion last Monday to $3.283 trillion as of today.

This significant plunge in market capitalization might be mainly attributed to the continues bearishness in Bitcoin. On the time of writing, Bitcoin has now dropped below $91,000 bringing its price to trade at a price of $90,704 marking a 3.9% decrease prior to now day.

The global crypto market cap value on TradingView
The worldwide digital currency market cap value on the 1-day chart. Source: TradingView.com

Featured image created with DALL-E, Chart from TradingView

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