Investments in Bitcoin Reach 5-Week High—Is a Bull Rally Coming?

Last week, bitcoin investment products had their greatest inflows in five weeks, according to Coinshares.

This spike comes as investors expect US Federal Reserve interest rate decreases, which might affect global markets, including cryptocurrencies.

Bitcoin Drives Crypto Asset Fund Flows
CoinShares reported $533 million in digital asset investment product inflows from August 18 to 24, indicating a market change.

Most of these inflows ($543 million) went to Bitcoin-related ETPs.

Bitcoin investment interest soared after Federal Reserve Chair Jerome Powell spoke at the Jackson Hole Symposium on August 21, according to the research.

Powell said the first interest rate decreases may come in September 2024, prompting investors to restructure their portfolios for a better climate for risk assets like cryptocurrencies.

According to CoinShares, Bitcoin alone benefited from this revived investor interest, driving most inflows into Bitcoin-related ETPs. BlackRock's iShares Bitcoin Trust (IBIT) dominated the week with $318 million inflows.

Bitcoin's susceptibility to interest rate predictions was shown by Friday's majority of inflows after Jerome Powell's dovish remarks.

Ethereum Fund Flow Performance

Ethereum-related investment products fared poorly throughout the same time. Despite new Ethereum ETF issuers attracting investors, Ethereum-related products lost $36 million.

This trend was driven by $118 million withdrawals from the Grayscale Ethereum Trust (ETHE), which outweighed newer Ethereum ETF inflows.

Recently launched Ethereum ETFs have received $3.1 billion in inflows despite these withdrawals since July 23. Grayscale's ETHE outflows of $2.5 billion largely offset this.

The CoinShares study also showed regional investment flows, with the US dominating with $498 million. Hong Kong and Switzerland also experienced $16 million and $14 million inflows.

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