This is how cryptocurrency funds are overcoming the 20 billion dollar collapse.

Cryptocurrency investment products have weathered last week's brutal market crash, attracting billions of dollars in new capital despite widespread panic selling. Investors poured $3.17 billion into cryptocurrency funds, demonstrating confidence even as the market experienced significant volatility and nearly $20 billion was liquidated.

Cryptocurrency funds overcome challenges

A recent report from CoinShares shows that, despite the total assets under management (AUM) dropping to 242 billion dollars during the price crash on Friday, capital flows remain strong in large cryptocurrency funds.

Source: CoinShares "On Friday, the market only recorded $159 million in outflows, indicating a rather weak response," said James Butterfill, Head of Research at CoinShares. This demonstrates the resilience of the sector, even as billions of dollars were liquidated.

Nic Puckrin, a cryptocurrency analyst and co-founder of The Coin Bureau, also stated that although the influx of capital is a positive signal, this crash has been a wake-up call for overconfident investors. He shared:

"The bloodbath we witnessed in the market last weekend is a brutal reminder that as the cryptocurrency market evolves and matures, the risks also become more severe."

He continued to emphasize:

"The emergence of spot cryptocurrency ETFs and interest from institutions has led investors to feel a false sense of security, but this remains the only market that operates after hours."

Bitcoin (BTC) leads the inflow with a figure of 2.7 billion dollars this week, bringing the total inflow since the beginning of the year to 30.2 billion dollars – still about 30% lower than last year's total of 41.7 billion dollars. The increase in participation has also pushed weekly trading volume to a record level of 53 billion dollars, of which 15.3 billion dollars was on Friday alone.

Ether funds register adjustments despite weekly profits

Ether investment products (ETH) recorded $338 million in net inflows over the week. However, they also experienced the largest daily withdrawal of $174.83 million on October 10.

Source: SoSoValueThe sell-off has pulled total net capital down to $14.91 billion and occurred against the backdrop of price volatility from Friday's crash. According to Butterfill, investors may have viewed Ether funds as "the most vulnerable funds" in this downturn.

Puckrin notes:

"Ironically, now that everything has stabilized, many top tokens have seen a strong recovery — including Ethereum, which is now back above $4,000. As a result, many spot investors are in a similar position as before the price crash."

Despite the adjustment, trading activity remains high with a daily volume of $4.77 billion. This indicates that market participation is still being maintained, even as sentiment temporarily shifts to lower risk.

Altcoin slows down

Altcoin-focused funds have lost momentum over the past week, despite ongoing enthusiasm for upcoming ETF launches in the U.S. Solana products (SOL) attracted $93.3 million, while XRP funds added $61.6 million – both sharply down from last week's surge of $706.5 million and $219 million.

This slowdown can be attributed to investors' caution ahead of the liquidation event. Puckrin said:

"The biggest shock over the weekend was that traders were forced to exit even profitable positions due to the automatic reduction of leverage (ADL) on exchanges – a risk management mechanism that most people may have never heard of. This is a blunt tool that certainly deserves attention as exchanges conduct a review of this mass liquidation event."

Not only that. The current strike by the U.S. government has left at least 16 cryptocurrency ETF applications pending approval.

Source: XAccording to ETF analyst Nate Geraci, once the strike ends, the market could witness a "tsunami" of new spot cryptocurrency ETFs – which could become a catalyst for capital inflow.

Mr. Teacher