Cryptocurrency investment products regained momentum last week as investor confidence improved following lower-than-expected US inflation data.
As CoinShares reported on Monday, cryptocurrency exchange-traded products (ETPs) saw inflows of $921 million last week, greater than offsetting outflows of $513 million from the previous week.
According to James Butterfill, head of research at CoinShares, the foremost reason for the uptick within the crypto funds market was renewed confidence in further US rate of interest cuts, supported by lower-than-expected CPI data released on Friday.
The consumer price index rose 0.3% in September, translating to an annual inflation rate of three%, each lower than expected.
“The ongoing U.S. government shutdown and the resulting absence of key macroeconomic data have provided investors with little guidance on the direction of U.S. monetary policy,” Butterfill wrote, adding that the CPI data helped restore anticipation for further rate cuts.
Bitcoin Surpasses Inflows; Ether becomes negative
Bitcoin (BTC), which had been the foremost driver of outflows every week earlier, almost completely recouped those losses last week with $931 million in inflows.
Ether (ETH) recorded outflows totaling $169 million for the primary time in five weeks, with every day outflows consistent throughout the week. “Despite this, 2x leveraged ETPs remain popular,” noted CoinShares’ Butterfill.
Crypto ETP flows by asset as of Friday (in thousands and thousands of US dollars). Source: CoinShares
Other altcoin ETPs, including Solana (SOL) and XRP (XRP), saw a slowdown in weekly inflows ahead of the U.S. exchange-traded fund (ETF) launch, recording inflows of $29.4 million and $84.3 million, respectively. Notably, Solana ETP inflows fell by greater than 81% in comparison with the previous week.
Last week's $931 million Bitcoin inflow brought total inflows of $9.4 billion for the reason that Federal Reserve began cutting rates of interest in September, Butterfill said.
Despite recent billion-dollar inflows, year-to-date Bitcoin fund totals are $30.2 billion, or about 38% below last 12 months's $41.6 billion, he added.
Overall, crypto funds' total assets under management reached $229 billion, with $48.9 billion in inflows recorded up to now this 12 months.
