Cryptocurrency Funds Hit $3.4B Inflow Alongside US Stock Inflows

7Ary...USep

16 Mar 2024

Record $56.1B inflow to US equities and $3.4B to crypto funds, marking historic investment surge amid inflation control optimism.
The financial markets have witnessed an influx into both cryptocurrency funds and US equity funds. Strategists at Bank of America, utilizing data from EPFR Global, have reported that for the week ending March 13, there was a notable surge in investments, marking a historic period for asset allocations.
US stock funds attracted an astonishing $56.1 billion of inflow which claimed a new record for the largest single-week inflow ever recorded. This rally outperformed the previous high of $53 billion noted in March 2021. One of the recipients of this flood, technology funds were the standout with an all-time allocation of $22 billion, highlighting Nvidia, Meta, and Amazon’s role in driving the S&P 500’s 8% rise since the year started.
The global stock market’s move to an all time high this year is the result of the improving investor sentiment that central banks, and especially the Federal Reserve, have been successful in controlling inflationary pressures without causing a major economic downturn. Considering an unexpected surge in consumer price inflation in the US to 3.2% in February, the equity markets have mostly been steady driven by prospects of the Federal Reserve commencing rate cuts from June.

Cryptocurrency Funds Witness Record Inflows

Parallel to the equity market’s success, cryptocurrency funds also achieved a milestone with a record-breaking $3.4 billion in inflows for the same week. This substantial movement of capitals into digital currency indicates a revival of institutional interest, with large American brokerage houses such as Merrill Lynch of Bank of America and Wells Fargo offering spot bitcoin exchange-traded funds (ETFs) to their clients.
The inclusion of cryptocurrency investment vehicles on mainstream financial platforms comes after the approval of spot Bitcoin ETFs in January by the Securities and Exchange Commission and is a proof of a clear trend of gaining acceptance of digital assets within the traditional investment portfolios.
This trend is also very patently shown by substantial donations by the most prominent industry players to crypto-friendly political action groups, thus revealing a deliberate strategic alignment of the crypto industry with favorable legislative environment.

Market Dynamics and Stagflation Concerns

During these inflows records, analysts have raised concerns about a possibility that a stagflationary environment may be created, with inflation rates rising, economic growth stagnating and unemployment rates increasing. Situations like this may result in a strategic change in investment preferences that will be directed to assets that used to serve as hedges from economic uncertainty- gold, commodities, and cryptocurrencies.
With regards to these macroeconomic indicators, the investors have also preferred cash as the safest investment, with $49.7 billion inflows in cash funds during the same period. This shift to liquidity represents caution in the face of signs of a weakening US labor market and the intensifying inflation in both developed and emerging economies.

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The cryptocurrency sector, in particular, is closely monitoring legislative developments, especially those aimed at extending anti-money laundering regulations to include crypto firms. With significant investments flowing into crypto funds, the industry is poised to engage in political advocacy to ensure a regulatory environment conducive to growth and innovation.
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Kris Marszalek Advocates Long-Term Bitcoin Holding Amid Drop

Kris Marszalek Advocates Long-Term Bitcoin Holding Amid Drop

Crypto.com CEO Kris Marszalek advises a long-term view on Bitcoin amid a 3.16% drop, urging patience for investors.
By Maxwell Mutuma11 hours ago

STORY HIGHLIGHTS

Kris Marszalek, CEO of Crypto.com, encourages investors to maintain a long-term perspective on Bitcoin holdings amid a recent significant drop in its value.
Bitcoin experienced a sharp decline of 3.16%, falling from a 24-hour peak of $72,504 to $68,379.
Marszalek attributes the recent bullish run and subsequent correction of Bitcoin to the influx of spot Bitcoin ETF.

Kris Marszalek, the CEO of Crypto.com, presented his opinion on the current state of the cryptocurrency market. With a distinctive drop in Bitcoin’s (BTC) value, Marszalek advises investors to take a long-term outlook for their Bitcoin holdings. The advice is timely as Bitcoin, as well as other leading cryptocurrencies like Ethereum, XRP, and Cardano, had been hit by notable losses.
Bitcoin crashed by 3.16% from the 24-hour peak of $72,504 to a low of $68,379. The drop is a part of a more significant drop in the crypto market, which affected many of the digital assets. Marszalek is, however, bullish on the future of Bitcoin investments despite the ongoing bearish trend. He made the comments while on CNBC’s Squawk Box, where he talked about the factors that were affecting the recent price moves.

Bitcoin Drop, a Constructive Correction

The discussion on CNBC was about the causes of Bitcoin’s bullish run, which had reached an all-time high only a few days before. The main reason for the surge, according to Marszalek, was the arrival of spot Bitcoin ETF. He observed that BTC ETF posed a supply-side threat, having an important influence on the cost of Bitcoin. “Constructive correction” was a phrase used by the CEO to characterize the recent decline as an attempt to reduce the excessive leverage within the system.
Marszalek rejected the idea that the downturn was caused either by BTC ETF or retail investors. However, he referred to the Options Market playing a big role in the current price drop. He also pointed out the low volatility of the price of Bitcoin, mentioning its relative stability compared to previous cycles. This stability, as Marszalek points out, indicates a mature market that is likely to have less rapid price changes over time.

Marszalek Views Cryptos as Decades-Long Assets

The effect of Bitcoin’s fall goes beyond the said leading coin; it also affects the entire crypto market with assets such as Ripple (XRP). The value of Bitcoin was falling, and so, along with lots of other cryptocurrencies, Ripple recorded significant downturns. However, Marszalek advices investors to wait and consider that such investments should have longer-term horizons.
He points out that Bitcoin and, by extension, Ripple cryptocurrencies should not be seen as short-term assets. He recommends that such assets should not be traded in the short term but rather held for decades. This view highlights an opinion on the lasting role of cryptocurrencies, even though market changes are temporary. Marszalek’s position, however, provides an opposite view to reactive trading strategies and suggests steadfast investment as a course of action even in times of volatility.
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