Crypto inflows surged to $3.3 billion last week amid economic fears in the United States. Bitcoin led the inflows with $2.9 billion, while Ethereum saw its largest inflow in 15 weeks amid the upcoming Pectra update. Moody's downgrade and rising Treasury yields drive demand for cryptocurrencies by investors as a hedge.

Crypto asset inflows broke records last week as traditional market risks intensified. Specifically, investment products in digital assets attracted the astonishing amount of $3.3 billion in inflows last week, bringing year-to-date (YTD) totals to a record $10.8 billion. Positive flows brought the total assets under management (AuM) to a new all-time high of $187.5 billion.

According to the latest CoinShares report, last week's crypto asset inflows reached $3.29 billion, with the United States dominating at $3.2 billion. This reflects growing domestic economic anxiety. Other notable inflows came from Germany ($41.5 million), Hong Kong ($33.3 million), and Australia ($10.9 million).

Meanwhile, Switzerland saw outflows of $16.6 million. The drop occurred as investors took advantage of the recent market optimism that saw Bitcoin set a new all-time high. CoinShares researcher James Butterfill highlights that Bitcoin remains the main beneficiary.

The pioneering cryptocurrency achieved $2.9 billion in crypto asset inflows, representing over 25% of all digital asset inflows for 2024. Meanwhile, investment products in Ethereum recorded $326 million in inflows.

This marked the highest level in 15 weeks, effectively marking five consecutive weeks of gains. The inflows occurred as sentiment improved around the Pectra update of the network moving to mainnet. Nevertheless, short Bitcoin products also attracted $12.7 million, marking the highest weekly inflow since December 2024.

James Butterfill cites investor caution, noting that they may be positioning themselves for short-term volatility. Despite this, the increase coincides with growing investor anxiety about the health of the U.S. economy. Specifically, concerns arise after the recent downgrade warning from Moody’s and the rise in Treasury yields:

"We believe that increasing concerns about the U.S. economy, driven by Moody’s and the resulting rise in Treasury yields, have led investors to seek diversification through digital assets," reads an excerpt from the report.