US 401(k) Approval Sparks $572M Crypto Fund Inflows Led by ETH & BTC
Last week’s crypto fund inflows surged to $572 million after the US approved cryptocurrency investments in 401(k) retirement plans. Ethereum products attracted $268 million, pushing year-to-date inflows to $8.2 billion and lifting assets under management to $32.6 billion. Bitcoin funds drew $260 million, reversing two weeks of outflows and reducing short positions by $4 million.
Among altcoins, Solana saw $21.6 million of inflows, raising its 2023 total to $874 million, while XRP gained $18.4 million amid favorable SEC lawsuit developments and SBI’s proposed ETF inclusion. Near added $10.1 million, and other tokens also recorded gains. Regional data show the US led with $608 million net inflows, Canada added $16.5 million, and select European markets saw $54.3 million in outflows.
Total trading volumes in digital asset funds dipped 23% month-on-month, reflecting seasonal slowdown. However, strong crypto fund inflows into Ethereum, Bitcoin, Solana and XRP underline growing institutional acceptance and could fuel further market momentum.
Bullish
The approval of 401(k) crypto investments has triggered significant crypto fund inflows, particularly into Ethereum and Bitcoin, reversing recent outflows and reducing short positions. This influx indicates strong institutional demand and improved market sentiment. In the short term, increased buying pressure may lift ETH and BTC prices as funds allocate to these products, while reduced Bitcoin shorts could dampen downward volatility. For altcoins like Solana and XRP, solid inflows driven by regulatory clarity and ETF prospects suggest selective upside potential.
In the long term, recurring inflows into retirement and institutional portfolios may create sustained demand across major tokens, supporting higher price floors and reducing market volatility. Despite seasonal volume dips, the robust capital inflows and growing regulatory acceptance bode well for overall market stability and growth.