US ETF Boom Drives ETH Investment Products to $2.2 Billion Annual Inflows
Ethereum-based investment products experienced significant growth last week, with global net inflows reaching $634 million, primarily driven by U.S. spot ETFs. This surge elevated Ethereum funds to a new annual record of $2.2 billion in net inflows, surpassing the previous peak of $2 billion set in 2021. In contrast, Bitcoin investment products faced outflows totaling $457 million during the same period. Meanwhile, XRP funds attracted a record $95 million in weekly inflows, coinciding with a 69% price increase over the past seven days, propelling XRP to become the third-largest cryptocurrency by market capitalization.
The substantial inflows into Ethereum and XRP funds indicate a shifting investor sentiment towards altcoins, suggesting the onset of an “alt-season”, especially with the recent trend of bitcoin dominance falling. Ethereum’s year-to-date net inflows of $2.2 billion reflect a dramatic turnaround in sentiment for the asset. XRP’s record inflows and price surge highlight growing investor interest, likely due to speculation about a potential U.S. spot XRP ETF. Conversely, Bitcoin’s outflows and its original struggle with the $100,000 resistance level suggest a capital shift towards altcoins, supported by increasing liquidity. Overall, digital asset investment products have seen eight consecutive weeks of net inflows, adding $270 million globally last week, bringing year-to-date inflows to a fresh peak of $37.3 billion.
Markets Surge Amid Administrative Shifts, as Bitcoin Futures Open Interest Tops $60 Billion
Bitcoin futures open interest has skyrocketed following the U.S. presidential election on November 5, climbing from $39 billion to $60.9 billion. Analysts attribute this rise to “organic growth,” driven by expectations of future price appreciation, rather than speculative excess. This surge reflects heightened trading activity and leverage use, with analysts noting no imminent risk of a market correction despite bitcoin retesting the $93,000 price support floor earlier this week before breaking above the $100,000 milestone less than seven days later.
The jump in bitcoin futures open interest—a 56% increase since November 5—signals growing institutional and retail confidence in cryptocurrency under anticipated policies and expectations of a favorable regulatory climate. Historically, political appointments and policy shifts have significantly impacted crypto markets, with crypto backer Paul Atkins as new SEC chair pick, and Scott Bessent, a prominent pro-crypto hedge fund manager, selected for Treasury Secretary. Beyond bitcoin’s reaction to administrative appointments, Ethereum also gained traction, with a 5% rally on November 27 and $90.1 million in ETF inflows. These metrics underscore a broad-based optimism across the crypto market, driving a 4.8% rise in global cryptocurrency market capitalization to $3.7 trillion.
Bitcoin Exchange Reserves Hit Multi-Year Lows, Prompting Supply Crunch
Bitcoin exchange reserves have plummeted to approximately 2.46 million BTC, a significant drop from around 3.2 million BTC in October 2021. This reduction of over 700,000 BTC indicates a substantial shift toward long-term holding, as investors transfer assets from exchanges to cold storage. Supporting this trend, Glassnode reports that the illiquid supply—BTC held by entities with minimal spending history—has increased by 185,000 BTC in the past 30 days, reaching an all-time high of 14.8 million BTC, which constitutes 75% of the current circulating supply of about 19.79 million coins.
The convergence of declining exchange reserves and rising illiquid supply suggests a tightening Bitcoin market. With 75% of Bitcoin’s circulating supply now considered illiquid, the available supply for trading is significantly constrained. This supply crunch, coupled with sustained or increasing demand, could exert upward pressure on Bitcoin’s price. However, despite these indicators, Bitcoin recently experienced a 2% decline prior to its rise above $100k, falling below $94,000. This volatility led to the liquidation of 207,454 traders, amounting to $578.6 million in total liquidations, with Bitcoin accounting for $90 million of this sum, primarily from long positions. These dynamics underscore the complex interplay between supply constraints and market behavior, highlighting the importance of monitoring both on-chain metrics and broader market trends.
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Ether exchange-traded funds (ETFs) have recently joined Bitcoin Futures ETFs on Wall Street, bringing more life to U.S. exchanges. On their first day on the exchanges, they registered more than $1.019 billion in trading volume, which is 23% of BTC ETF’s cumulative volume during its debut. While lower than BTC’s volume, the high number shows […]
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