Digital asset investment funds have experienced a significant surge in inflows, with $932 million pouring in over the past week, according to data from CoinShares. This marks the second consecutive week of positive flows since the recent market downturn, driven by an immediate response to the U.S. Consumer Price Index (CPI) report, which suggested that inflationary pressures are moderating.

The CPI report, released on May 15, revealed that inflation rose by 0.3% in April, following a 0.4% increase in March, with a 3.4% year-over-year growth driven by significant increases in the energy and food sectors. This news sparked a wave of optimism in the cryptocurrency market, with investors pouring into digital asset investment products.

Interestingly, the inflows were an immediate response to the lower-than-expected CPI report, with the latter three trading days of the week making up 89% of the total flows. This highlights the view that Bitcoin prices have recoupled to interest rate expectations. Despite higher inflows, weekly volumes remained relatively low at $10.5 billion, a sharp contrast to the $40 billion observed in March.

Grayscale's Bitcoin ETF saw minor inflows over the week, totaling $18 million, but has witnessed outflows of $16.6 billion since its conversion in January. Regionally, Hong Kong and Canada experienced outflows of $83 million and $17 million, respectively.

A wide range of altcoin funds saw inflows over the previous week, including Solana, Chainlink, and Cardano, each seeing net flows of $4.9 million, $3.7 million, and $1.9 million, respectively. Conversely, Ether funds saw outflows of $23 million, likely due to concerns over how the Securities and Exchange Commission (SEC) will decide on spot Ether ETFs, with the first deadline set to expire on May 23.

Two ETF analysts, James Seyffart and Eric Balchunas, have revised their prediction regarding the SEC's approval of spot Ether ETFs, now believing there is a 75% chance of approval after hearing new information about the SEC's stance.

Overall, the surge in inflows into digital asset investment funds suggests a growing optimism in the cryptocurrency market, driven by positive economic indicators and potential regulatory developments. As the market continues to evolve, it remains to be seen how these trends will shape the future of cryptocurrency investment.