Cryptocurrency investment products experienced a resurgence last week, with investor confidence boosted by lower-than-expected US inflation data. Crypto exchange-traded products (ETPs) recorded $921 million in inflows, more than compensating for the $513 million in outflows observed the previous week, according to a report by CoinShares on Monday.
The primary catalyst for this positive trend in the crypto fund market was renewed optimism regarding further US interest rate cuts. This sentiment was reinforced by the release of lower-than-expected Consumer Price Index (CPI) data on Friday. James Butterfill, CoinShares' head of research, noted that the ongoing US government shutdown and the resulting lack of key macroeconomic data had provided limited guidance on the direction of US monetary policy. The CPI data, however, helped to rekindle expectations for additional rate reductions.
Bitcoin Dominates Inflows, While Ether Experiences Outflows
Bitcoin (BTC), which had been the leading cause of outflows the week prior, largely recouped those losses with $931 million in inflows last week. In contrast, Ether (ETH) experienced outflows for the first time in five weeks, totaling $169 million, with consistent daily outflows observed throughout the week. Despite this, CoinShares' Butterfill pointed out that 2x leveraged ETPs continue to be a popular investment choice.
Other altcoin ETPs, including those for Solana (SOL) and XRP (XRP), saw a moderation in weekly inflows in the lead-up to US exchange-traded fund (ETF) launches. Solana ETPs recorded $29.4 million in inflows, while XRP ETPs saw $84.3 million. Notably, Solana ETP inflows decreased by over 81% compared to the previous week.
The $931 million inflow for Bitcoin last week brings the total inflows since the US Federal Reserve began cutting rates in September to $9.4 billion, according to Butterfill.
Despite significant inflows in recent times, Bitcoin funds' year-to-date total stands at $30.2 billion, which is approximately 38% lower than the $41.6 billion recorded last year.
Overall, the total assets under management in crypto funds have reached $229 billion, with year-to-date inflows totaling $48.9 billion.