Emerging Markets See Record Inflows as Dollar Weakens, Fueling Crypto Sentiment
Investors are flooding emerging markets at unprecedented levels, with MSCI exchange-traded funds attracting $20.6 billion in January alone—marking the 12th consecutive month of inflows. The MSCI Emerging Markets Index nearly tripled its prior two-month intake and doubled its 2018 peak, drawing $33.57 billion in 2026 year-to-date.
Geopolitical tensions and a weakening dollar have accelerated the shift. Emerging-market equity funds posted one of their largest weekly inflows on record, with Asian equities leading the charge. JPMorgan notes these flows aren’t cannibalizing U.S. assets but supplementing them—a sign of broadening risk appetite.
The rally mirrors crypto markets’ institutionalization phase, where capital seeks asymmetric returns beyond traditional corridors. bitcoin and Ethereum’s correlation with EM equities has tightened, suggesting macro-driven liquidity spills into digital assets.
