Key Points
- Cryptocurrency investment products experienced a reversal with inflows of $436 million after weeks of outflows.
- Bitcoin (BTC) saw a significant inflow of $436 million, reversing a 10-day outflow streak, while Ethereum (ETH) continued to face challenges.
Data from CoinShares indicates a change in cryptocurrency investment trends. After weeks of outflows, there was a significant inflow of $436 million.
Investment Reversal
This reversal is attributed to changing market expectations of a potential 50 basis point interest rate cut on September 18. James Butterfill, CoinShares’ head of research, noted this shift was fueled by comments from former NY Fed President Bill Dudley.
However, the inflow did not impact trading volumes in exchange-traded funds, which remained steady at $8 billion for the week. This figure is notably lower than the year-to-date average of $14.2 billion. The U.S. led with $416 million in inflows, while Switzerland and Germany contributed $27 million and $10.6 million, respectively.
Bitcoin and Ethereum Performance
Bitcoin (BTC) was the primary beneficiary of this reversal. It ended a 10-day outflow streak totaling $1.18 billion with an inflow of $436 million. However, short-Bitcoin products saw $8.5 million in outflows after three consecutive weeks of inflows.
In contrast, Ethereum (ETH) continued to face challenges, with $19 million in outflows. This was reportedly driven by concerns over the profitability of layer-1 following Dencun. Other cryptocurrencies such as Solana (SOL) saw their fourth consecutive week of inflows, totaling $3.8 million. Blockchain equities also experienced a boost, with $105 million in inflows attributed to the launch of several new ETFs in the U.S.
This change in investment trends comes after Bitcoin experienced a sharp decline in exchange activity earlier in September. Daily inflows dropped 68% from 68,470 BTC to 21,742 BTC, and outflows fell 65% from 65,847 BTC to 22,802 BTC.
