The latest report Coinshares has revealed that the cryptocurrency market witnessed a significant surge in investment activity last week, with digital asset investment products recording their largest inflows in five weeks.
This rise comes as investors anticipate possible interest rate cuts by the US Federal Reserve, which could significantly impact financial markets, including cryptocurrencies.
crypto Asset Fund Flow Analysis: bitcoin Leads the Trend
According to CoinShares' report, during the week of August 18-24, digital asset investment products saw inflows totaling $533 million, marking a notable shift in market sentiment.
The majority of these inflows went into bitcoin-related exchange-traded products (ETPs), which accounted for $543 million.
The report revealed that the surge in interest in bitcoin investments coincided with comments made by Federal Reserve Chairman Jerome Powell during the Jackson Hole Symposium on August 21.
Powell hinted that the first interest rate cuts could come as early as September 2024, an outlook that has prompted investors to reposition their portfolios in anticipation of a potentially more favorable environment for risk assets like cryptocurrencies.
According to CoinShares, bitcoin alone emerged as the main beneficiary of this renewed investor interest, channeling the majority of inflows into bitcoin-related ETPs. BlackRock’s iShares bitcoin Trust (IBIT) led the pack, recording $318 million in inflows during the week.
CoinShares noted in the report:
Interestingly, most of those inflows occurred on Friday, following dovish comments from Jerome Powell, indicating bitcoin's sensitivity to interest rate expectations.
ethereum Performance on Fund Flows
On the other hand, ethereum-related investment products did not perform well during the same period. Even though new ethereum ETF issuers continued to attract investments, there were net outflows of $36 million from ethereum-related products.
Grayscale ethereum Trust (ETHE) was a major contributor to this trend, with outflows totaling $118 million offsetting inflows seen in newer ethereum ETFs.
Interestingly, the new ethereum ETFs have accumulated $3.1 billion in inflows despite these outflows since their launch on July 23. However, this has been partially offset by Grayscale’s $2.5 billion in ETHE outflows.
The CoinShares report also highlighted regional differences in investment flows, with the United States leading the way with $498 million in inflows. Other regions, such as Hong Kong and Switzerland, also saw notable inflows, with $16 million and $14 million respectively.
In contrast, Germany experienced smaller outflows worth $9 million, making it one of the few countries with net outflows during the year.
Featured image created with DALL-E, chart by TradingView
