Key takeaways
Did crypto funds see inflows despite the stock market crash?
Crypto funds attracted $3.17 billion in inflows, even as nearly $20 billion in liquidations roiled the market.
Are altcoin and Ether funds showing weaknesses?
Yes, Ether and altcoin funds saw significant outflows mid-week.
Crypto investment products shrugged off last week’s brutal market crash, attracting billions in new capital despite widespread panic selling. Investors poured $3.17 billion into crypto funds – a sign of confidence even during periods of high volatility and nearly $20 billion in liquidations.
Crypto funds defy all odds
A recent report from CoinShares found that even as total assets under management (AUM) fell to $242 billion during Friday’s flash crash, inflows remained strong into major crypto funds.
Source: CoinShares
“On Friday there was little reaction with outflows of a paltry $159 million,” noted James Butterfill, head of research at CoinShares, proving the sector’s resilience despite the liquidation of billions.
Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, also claimed that while the inflows are encouraging, the crash was a wake-up call for overconfident traders. He told AMBCrypto:
“The bloodbath we witnessed in the markets this weekend is a stark reminder that as the crypto market grows and matures, the risks are magnified.”
He added:
“The arrival of spot crypto ETFs and institutional interest have lulled investors into a false sense of security, but it remains the only market that trades after hours.”
Bitcoin (BTC) dominated inflows with figures of $2.7 billion for the week, bringing year-to-date inflows to $30.2 billion – still around 30% below last year’s total of $41.7 billion. The increase in participation also pushed weekly trading volumes to a record high of $53 billion, including $15.3 billion on Friday alone.
Ether funds see decline, despite weekly gains
Ether (ETH) investment products saw $338 million in net inflows during the week.
However, they also faced the largest single-day outflow of $174.83 million on October 10.
Source: SoSoValue
The selloff drove cumulative net inflows to $14.91 billion and occurred during the volatility of Friday’s flash crash. According to Butterfill, investors likely viewed Ether funds as the “most vulnerable” during the downturn.
Puckrin noted:
“Ironically, now that the dust has settled, many blue-chip tokens have seen a strong rebound, including Ethereum, which looks particularly strong above $4,000. As such, many spot investors find themselves in a similar position to where they were before the flash crash.”
Despite this decline, trading activity remained high, with $4.77 billion in daily volumes. This suggests continued market engagement, even if sentiment briefly turned away from risk.
Altcoins are slowing down
Altcoin-focused funds lost momentum last week, despite continued enthusiasm for upcoming US ETF launches. Solana Products (SOL) attracted $93.3 million, while XRP funds added $61.6 million – both seeing sharp declines from the previous week’s increases of $706.5 million and $219 million.
This slowdown could be attributed to investors’ caution in the face of liquidation. Puckrin said:
“The biggest shock of the weekend was that traders were forced out of even profitable positions due to automatic deleveraging (ADL) on the exchanges – a risk management mechanism that most have not even heard of. It is a brutal instrument that certainly deserves some scrutiny as the exchanges process this mass liquidation event.”
But that’s not all. Especially since the ongoing US government shutdown has left at least 16 crypto ETF applications awaiting approval.
Source:
According to ETF analyst Nate Geraci, once the shutdown ends, the market could see an “influx” of new crypto spot ETFs – potentially an inflow catalyst.
