Bitcoin leads $321 million inflows into crypto as Fed rate cuts spur growth

Digital asset investment products saw inflows for the second consecutive week this month, with investors pouring $321 million into the industry, according to CoinShares‘ latest weekly report.

This influx boosted the total assets under management (AuM) for crypto exchange-traded products (ETPs) by 9%, bringing the total to $85.8 billion. The overall investment product volume also increased to approximately $9.5 billion.

James Butterfill, head of research at CoinShares, linked this positive trend to the Federal Reserve’s recent decision to cut interest rates by 50 basis points. He explained:

“This surge was likely driven by the Federal Open Market Committee (FOMC) comments last Wednesday, which took a more dovish stance than anticipated, including a 50 basis point interest rate cut.”

Bitcoin, US dominate flows

A breakdown of the flows showed that Bitcoin-based investment products led the inflows, generating $284 million in net gains globally last week. Notably, major crypto funds from firms like BlackRock, Bitwise, Fidelity, ProShares, and 21Shares contributed to this rebound, collectively adding $321 million in net inflows.

The positive price momentum for Bitcoin also attracted investors with bearish sentiment, who allocated $5.1 million to short-Bitcoin funds.

Ethereum faced its fifth consecutive week of outflows, totaling $29 million. This trend stems from ongoing withdrawals from Grayscale’s ETHE product and declining interest in new offerings.

According to Farside data, ETHE experienced outflows between $13 million and $18 million for three straight days last week, overshadowing minor inflows from other products, including Grayscale’s Mini-Trust.

Meanwhile, Solana maintained its current positive trend, adding $3.2 million in inflows last week. This flow can also be linked to the announcements of several traditional financial institutions announcing plans to launch financial services on the network during the latest Solana Breakpoint event in Singapore.

Other large-cap altcoins, including XRP and Litecoin, saw combined inflows of $300,000.

Across regions, the US unsurprisingly emerged as the leading contributor to last week’s inflow, accounting for $277 million, followed by Switzerland with $63 million.

In contrast, Germany, Sweden, and Canada experienced outflows of $9.5 million, $7.8 million, and $2.3 million, respectively.

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