Last week saw a surge in crypto inflows, with digital asset investment products receiving a remarkable $3.3 billion. This pushed the year-to-date total to a record $10.8 billion and boosted total assets under management to an all-time high of $187.5 billion.

According to the recent CoinShares report, the US led the inflows with $3.2 billion, reflecting increased economic concerns domestically. Significant inflows also came from Germany ($41.5 million), Hong Kong ($33.3 million), and Australia ($10.9 million), while Switzerland experienced outflows of $16.6 million. Bitcoin remains the favored cryptocurrency, attracting $2.9 billion in inflows, which makes up over a quarter of all digital asset inflows for 2024.

Ethereum investment products saw inflows of $326 million, marking the highest in 15 weeks amid positive sentiment surrounding the network's Pectra upgrade. Additionally, there were notable inflows into short-Bitcoin products, amounting to $12.7 million as investors brace for potential volatility.

The increase in crypto inflows coincides with escalating concerns about the US economy, sparked by Moody's recent downgrade warning and rising Treasury yields. Investors seeking diversification in light of these uncertainties are turning to digital assets as a hedge against sovereign credit risk and monetary tightening.

Amid these macroeconomic uncertainties, digital assets like Bitcoin are increasingly viewed as portfolio diversifiers, leading to a string of substantial inflows totaling $10.5 billion in the past six weeks. With ongoing fiscal and monetary challenges in the US, the trend of reallocating capital towards decentralized assets may continue.