Investors Shift Focus, Driving $436 Million into Crypto Funds.
CoinShares, Europe's largest digital asset management firm, reported a significant influx of $436 million into cryptocurrency funds last week. This influx marks a reversal from the previous week's trend of $1.2 billion in outflows. Analysts attribute this recovery to changing market expectations regarding a possible 25 basis point interest rate cut scheduled for September 18, with some anticipating a shift to a 50 basis point reduction. Notably, comments from former New York Fed President Bill Dudley are believed to have played a crucial role in influencing this positive sentiment.
Last Week's Crypto Fund Figures.
Bitcoin (BTC) emerged as the primary
beneficiary, attracting $436 million
after a cumulative outflow of $1.18
billion over ten days. This fund flow
indicates a significant recovery for the
leading cryptocurrency, while short Bitcoin funds experienced an $8.5
million outflow following three weeks
of consecutive inflows.
Conversely, Ethereum (ETH) faced a $19 million outflow, underscoring the ongoing challenges for the second- largest cryptocurrency. Analysts link Ethereum's struggles to profitability issues regarding Layer 1 solutions, aggravated by recent developments related to the Decun upgrade. This outflow positions Ethereum among several crypto funds that recorded negative fund flows this week.
US Dominates Fund Inflows Again.
Regionally, the US stood out with a significant total of $416 million in inflows, markedly higher than other regions. Switzerland and Germany also recorded notable flows of $27 million and $10.6 million, respectively. In contrast, Canada reflected a more cautious approach with an $18 million outflow, indicative of the North American market outside the US.
Despite the overall positive inflow trend, Exchange-Traded Funds (ETFs) experienced low trading volumes throughout the week, averaging $8 billion. This figure remains considerably below the year-to-date average of $14.2 billion.