Cryptocurrency inflows set a new record last week, reaching the third-largest level in history as trading chaos and its impact on the US dollar continue to shake the markets.
This marks a shift from a prolonged three-week trend of negative flows, with Bitcoin resisting the trend unlike altcoins.
Inflows into cryptocurrency reached $3.4 billion last week
The latest CoinShares report indicates that cryptocurrency inflows reached $3.4 billion last week, reversing a three-week trend of negative flows.
Cryptocurrency outflows reached $146 million a week ago. The two previous weeks recorded cryptocurrency outflows of $795 million and $240 million, respectively.
James Butterfill, head of research at CoinShares, notes last week's positive flows as the largest cryptocurrency inflows in history. He attributes this sharp change to concerns about the impact of tariffs on corporate profits and the associated effect on the US dollar.
"We believe that concerns about the impact of tariffs on corporate profits and the dramatic weakening of the US dollar are reasons why investors have turned to digital assets," wrote Butterfill.
According to Butterfill, investors are gradually viewing cryptocurrency as a new safe haven outside of Bitcoin. However, given its leadership as the largest cryptocurrency by market capitalization, Bitcoin investment products have been the primary beneficiaries, recording $3.188 billion in inflows. Based on the data, XRP outperformed other altcoins after last week's trend shift. This corresponds with the growing sentiment that the approval of a futures ETF for XRP by ProShares (exchange-traded funds) is causing optimism.
According to BeInCrypto, forecasts suggest that a spot ETF for XRP could emerge, potentially attracting $100 billion to the Ripple payment token.
"A spot ETF for XRP could be next, unlocking real demand and driving prices higher. $100 billion+ could soon flow into XRP," wrote analyst Armando Pantoja.
The implications of tariff impacts on corporate profits and the US dollar
A recent CoinShares report examined the role of the US government in the country's economy and the place of the US Federal Reserve (Fed) amid the chaos.
On one hand, President Donald Trump is exerting political pressure on the US Federal Reserve (Fed) to lower rates. However, the FOMC (Federal Open Market Committee) has rejected further interest rate cuts. The Fed has also made significant downward revisions to its economic forecasts for 2025.
The Fed's actions indicate weaker growth and persistent inflation, while Trump's moves signal potential political battles over monetary policy.
"Is the US government taking control of the economy? Is the Fed losing control?" asks CoinShares.
The US dollar bears the brunt of this chaos. For instance, BeInCrypto recently reported a sharp decline in the dollar index (DXY) amid Trump's pressure to dismiss Fed Chair Jerome Powell.
In this regard, analysts highlight Bitcoin's transition from a risk asset to a hedge against monetary chaos. Economic shocks in the US, including GDP for the first quarter of 2025 and new tariffs, contribute to this outcome, leading Bitcoin to outperform the Nasdaq-100 by 4.5% since the announcement of tariffs.#Write2Earn #BinanceSquare #Squar2earn #Binance #BinanceAlphaAlert $ETH