The global crypto investment products managed by BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21 Shares have significantly rebounded. 

Last week, a substantial net inflow of $321 million was recorded, sparking renewed interest within the crypto community. Although this surge is significant, it pales compared to the impressive $3.2 billion inflow recorded sometime in July. Nevertheless, this market rebound indicates that investors are regaining confidence in the cryptocurrency market. 

Reduced Interest Rate Hints Boost Crypto Investment Products

In a report, CoinShares Head of Research, James Butterfill, attributed this surge to the comments from the Federal Open Market Committee (FOMC). Following the recently concluded meeting, the FOMC announced a potential 50 basis point interest rate cut. This soft stance towards the digital market likely encouraged investors to seek riskier assets like cryptocurrencies.

As a result of this renewed interest, total assets under management in these funds increased by 9%. Additionally, trading volume rose 9% compared to the previous week, reaching $9.5 billion. This uptick in both inflows and trading activity suggests a reinvigorated market. It sparked optimism among investors who aim to seize opportunities from positive economic indicators and better market conditions.

Meanwhile, Arthur Hayes, co-founder of BitMEX, has called the Fed’s rate cut a political move. He even forecasted a market crash right after the interest rate announcement. 

Bitcoin ETF Leads the Charge

In the blog report, Butterfill shared that the  Bitcoin ETF products have continued to dominate the market. Last week, the digital investment products raked in $284 million in net inflows. This strong performance aligns with the recent positive price movement of Bitcoin, which has not only bolstered traditional investment flows.  

However, it also attracted $5.1 million in net inflows into short-bitcoin funds. Some investors, including prominent figures like Hayes, have predicted a potential upward momentum for the digital asset in the days ahead. 

In addition, Solana (SOL) dropped to $143 as investment products continue to receive steady, modest weekly inflows, gathering $3.2 million in the past week. This growth follows the newly launched Solana validator, Firedancer client, which likely heightened investor interest in the Solana ecosystem.

Ethereum Outflows vs. U.S. ETF Inflows

Conversely, Etherum-based investment products faced a challenging week, registering $29 million in net outflows. marking the fifth consecutive week of negative flows totaling $187.7 million. The ongoing outflows are mainly due to Grayscale’s ETHE fund and the Ethereum Foundation’s significant sell-offs.

In contrast, the newly launched U.S. spot Ethereum ETFs attracted $2.2 billion in net inflows, with the U.S. leading by $277 million. Switzerland saw its second-largest weekly inflow of $63 million. Germany, Sweden, and Canada experienced outflows, showing varied regional investor trends.

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