Inflows into cryptocurrency mutual funds rose sharply last week, offering cautious optimism that investors are expanding their exposure to digital assets despite geopolitical uncertainty and central bank monetary tightening.
Digital asset investment products saw $127 million in cumulative inflows for the week ending March 6, according to data from CoinShares. A CoinShares representative told Cointelegraph that this was the highest weekly inflows since Dec. 12, 2021. The increase was also significantly higher than the $36 million tickets registered the previous week.
As in previous weeks, Bitcoin (BTC) products posted the largest weekly receipts at $95 million. Bitcoin fund flows have increased for seven consecutive weeks. ether (ETH) posted revenue totaling $25 million, which was the most in 13 weeks. Inflows into multi-asset investment products also increased by $8.6 million.
So far this year, Bitcoin funds have seen $166 million in cumulative inflows.
Institutions are optimistic #bitcoin!
The amount of BTC held by public companies has gained significant market share from that held by spot ETFs. https://t.co/DZP2AlMXlh
โ Cointelegraph (@Cointelegraph) January 3, 2022
Crypto markets have exhibited a higher correlation with public actions since the start of the Covid-19 pandemic, meaning digital assets have been negatively affected by the shift from legacy finance to a more risk-free environment in recent months. That change was largely fueled by plans by the Federal Reserve to begin normalizing monetary policy. Recent events in Ukraine have also negatively affected demand for riskier investments, which includes crypto.
Related: Rate Hikes, CPI and War in Europe: 5 Things to Watch in Bitcoin This Week
However, according to cryptocurrency hedge fund Pantera Capital, the correlation between stocks and cryptocurrencies is a "short-lived thing." As CEO Dan Morehead indicatedSince 2010, correlations between Bitcoin and the S&P 500 typically increase for a two-month period before decoupling. Morehead noted six S&P 500 downtrends during that period.