Crypto Investment Products Post Record Inflows Amid Market Rally, US Government Shutdown

Cryptocurrency investment products have recorded their highest-ever weekly inflows, fueled by investor concerns over US government stability and the ongoing rally in spot crypto markets. According to CoinShares, global crypto exchange-traded products (ETPs) saw $5.95 billion in inflows during the week ending Friday, setting a new record. Factors Behind the Surge James Butterfill, CoinShares’ head of research, attributed the unprecedented inflows to several macroeconomic factors. “We believe this was due to a delayed response to the FOMC [Federal Open Market Committee] interest rate cut, compounded by very weak employment data , and concerns over US government stability following the shutdown,” he said. Bitcoin, the largest cryptocurrency by market capitalization, hit a new historic high above $125,000 on Saturday, coinciding with the surge in inflows. Bitcoin ETPs Lead the Pack The $5.95 billion inflows surpassed the previous record of $4.4 billion from mid-July by 35%, underscoring the scale of investor interest. Unlike the earlier record, which was almost evenly split between Bitcoin and Ether, this time Bitcoin dominated inflows, attracting a record-breaking $3.6 billion. “Despite prices closing in on all-time highs during the week, investors did not choose to buy short investment products,” Butterfill noted. Ether ETPs still posted strong results, drawing $1.48 billion in inflows and pushing year-to-date totals to $13.7 billion — nearly three times last year’s figure. Solana ETP inflows ranked third at $706.5 million, while XRP products added $219.4 million, both setting their own records. Total Assets Under Management Reach New High In line with these inflows, the total assets under management (AUM) in crypto funds surged past $250 billion for the first time, hitting $254.4 billion. This milestone signals renewed institutional and retail investor confidence in cryptocurrency-based products. ETF Launches Continue Despite Shutdown Concerns The record-setting week for crypto ETPs unfolded even as the US Securities and Exchange Commission (SEC) shut down operations last week due to a government shutdown. This development raised concerns about potential delays for high-profile exchange-traded fund (ETF) approvals expected in October. According to Crypto in America’s Eleanor Terrett, the SEC retains the ability to act on fraud and market emergencies during the shutdown but is widely expected to experience routine delays. “It’s like a rain delay,” Bloomberg’s senior ETF analyst Eric Balchunas commented. Despite these concerns, Grayscale Investments, the second-largest US crypto ETF provider after BlackRock, launched two new staking-focused products on Monday. Staking-Focused ETFs Arrive The Grayscale Ethereum Mini Trust ETF (ETH) and the Grayscale Ethereum Trust ETF (ETHE) now allow investors to receive additional staking rewards alongside gains from the funds’ market performance. These launches highlight the continued innovation in crypto investment products, even amid regulatory and operational uncertainties in the United States. The combination of record inflows, rising asset prices, and new product launches underscores a bullish environment for digital asset investment vehicles.