Digital asset investment products experienced a significant reversal this past week, with inflows amounting to $436 million, marking a notable shift after a period of outflows totaling $1.2 billion. The inflows were likely driven by changing market expectations for a 50 basis point interest rate cut on September 18th, following comments made by former New York Federal Reserve President Bill Dudley. Trading volumes in exchange-traded funds (ETFs) remained flat at $8 billion, significantly lower than the yearly average of $14.2 billion.
The United States led the inflows, recording $416 million, followed by Switzerland and Germany, which saw $27 million and $10.6 million in inflows, respectively. In contrast, Canada experienced minor outflows, totaling $18 million.
According to CoinShares, Bitcoin was the primary beneficiary of these inflows, recording $436 million after enduring a 10-day streak of outflows that had amounted to $1.18 billion. Short-bitcoin positions saw a reversal, with $8.5 million in outflows following three consecutive weeks of inflows, indicating a shift in market sentiment.
Ethereum, on the other hand, continued to face challenges, suffering $19 million in outflows. This marks it as one of the few assets to experience outflows this week, alongside short-bitcoin. The struggles surrounding Ethereum are thought to be tied to concerns about Layer 1 (L1) profitability after recent developments from Decun.
Solana and Blockchain Equities on the Rise
Conversely, Solana saw its fourth consecutive week of inflows, totaling $3.8 million, indicating continued investor confidence. Blockchain equities also performed well, recording $105 million in inflows. This surge was attributed to the launch and seeding of several new ETFs in the United States, reflecting growing interest in the blockchain sector.
The recent trends in digital asset fund flows suggest a shifting sentiment among investors, particularly in response to global economic developments and evolving market conditions surrounding leading assets like Bitcoin and Ethereum.
