Geopolitical Crisis Fuels Crypto Investment Appetite, Net Inflows Reach $619 Million in One Week

Last week, investment products related to digital assets recorded net inflows of $619 million, indicating investors' positive allocation attitude towards crypto assets amid tensions in Iran. A CoinShares report showed that inflows reached as high as $1.44 billion in the first three days of the week, and market sentiment was once high. However, a significant pullback occurred from Thursday to Friday, with a total outflow of $829 million. Even though the US non-farm payroll data for the week was far weaker than expected, which should have been beneficial to risk assets under normal circumstances, funds still chose to take profits.

Despite short-term market volatility, geopolitical risks pushed oil prices higher, suppressing expectations of a decline in inflation that might have been triggered by weak employment, thereby providing structural support for crypto assets. Overall, investors' interest in digital assets remains resilient in the face of uncertainty.

Among the segmented assets, Uniswap and Chainlink received small inflows of $1.4 million respectively, and multi-asset class products absorbed a total of $5.4 million. In contrast, XRP suffered concentrated redemptions, with related products experiencing net outflows of $30.3 million, reflecting some investors' risk aversion towards altcoins. Funds were highly concentrated in the United States, contributing net inflows of $646 million and becoming the core force driving the overall trend. In comparison, the European market saw net outflows of $23.8 million, and Asia and Canada also experienced capital withdrawals of $2.2 million and $3.6 million respectively, indicating a clear divergence in regional sentiment. Options data shows that the market still retains a large number of short-term put options with strike prices between $61,000 and $64,000, indicating that traders expect volatility to continue, rather than a one-sided decline. Overall, the market is still in a state of risk hedging and opportunity capture.