Definition ∞ Investor Capital Flow refers to the movement of financial resources, typically in the form of fiat currency or stablecoins, into or out of the digital asset market by individual or institutional investors. This represents the strategic allocation or withdrawal of funds from the cryptocurrency ecosystem. It measures the net change in investment within the market.
Context ∞ Positive investor capital flow into digital assets suggests increasing confidence and robust demand, potentially supporting price appreciation and market expansion. Conversely, sustained outflows can indicate heightened risk aversion or a strategic shift towards alternative asset classes. These flows are critical for understanding market sentiment and overall liquidity conditions.