Crypto Inflows Reach $882 Million: Bitcoin Dominates as Hedge

Digital asset investment products witnessed a surge in institutional interest last week, raising $882 million in crypto inflows globally.

This marks the fourth consecutive week of gains, pushing year-to-date (YTD) inflows to $6.7 billion, just shy of the $7.3 billion peak observed in early February.

Four Consecutive Weeks of Crypto Inflows

The latest CoinShares report shows the fourth week of consecutive positive flows. In the week before that, crypto inflows hit $2 billion. The week prior, crypto inflows reached $3.4 billion as investors turned to digital assets for their haven status.  

Before that, inflows into digital asset investment products were $146 million, where XRP bucked the trend.

CoinShares’ researcher James Butterfill notes that Bitcoin led the charge with $867 million in inflows, reflecting its growing role as a macro hedge amid rising economic uncertainty.

Since the launch of spot Bitcoin ETFs (Exchange-Traded Funds) in the US in January 2024, cumulative net inflows have hit $62.9 billion, surpassing the previous high of $61.6 billion. While Ethereum has seen a strong price recovery, investor sentiment remains lukewarm, with only $1.5 million in inflows last week.

Sui, on the other hand, stands out among altcoins. It recorded $11.7 million in inflows, overtaking Solana weekly and year-to-date. Sui’s total inflows now stand at $84 million YTD, outpacing Solana’s $76 million, despite the latter seeing $3.4 million in outflows over the past week.

CoinShares attributed the sharp rise in crypto prices and investment flows to multiple converging macroeconomic trends.

“We believe the sharp increase in both prices and inflows is driven by a combination of factors: a global rise in M2 money supply, stagflationary risks in the US, and several US states approving Bitcoin as a strategic reserve asset,” wrote Butterfill.

Indeed, states such as Arizona and New Hampshire advanced their efforts with Bitcoin strategic reserves. Nevertheless, others, like Florida, hit a brick wall.

Macro Shifts Offering a Trading Compass for Crypto Investors

In the same tone, the expanding global M2 money supply is becoming a focal point for Bitcoin investors. Data on TradingView shows China’s M2 money supply remains at an all-time high of $326.13 trillion. This signals a potential flood of global liquidity that risk assets like Bitcoin are now absorbing.

Analysts have also observed that Bitcoin’s price correlates positively with global M2 trends. This outlook reinforces Bitcoin’s narrative as a macro-responsive asset.

However, not all experts are convinced. While a growing consensus is linking M2 expansion with crypto price action, skeptics argue that the relationship may be overstated.

Recession fears in the US are further fueling crypto allocations. Goldman Sachs recently raised its 12-month US recession probability to 45%, quietly increasing exposure to Bitcoin via funds that include spot ETF products.

Investors interpret this as a signal that aligns with the broader theme of crypto as a hedge against faltering traditional finance (TradFi) instruments and dollar-denominated assets.

This perception is gaining institutional validation. Standard Chartered recently noted that Bitcoin is increasingly positioned as a hedge against Treasury market volatility and systemic financial risk. This is particularly relevant as US deficits balloon and Treasury yields remain volatile.

The bullish momentum in crypto inflows, alongside Bitcoin’s increasing role in institutional portfolios, suggests that investors are turning to digital assets as both a directional bet and a macro hedge.