Digital Asset Investment Products Inflow Rebound Ahead FOMC

Key Points:

• Digital asset investment products saw $436 million in inflows after weeks of $1.2 billion in outflows.
• Bitcoin led the inflows with $436 million, while Ethereum continued to see outflows of $19 million due to Layer 1 profitability concerns.

Digital asset investment products recorded significant inflows of $436 million after several successive weeks of outflows amounting to $1.2 billion.

Read more: Digital Asset Investment Products See Largest Outflows Since March

Digital Asset Investment Products Inflow Rebound Amid Rate Cut Speculation

This was allegedly driven by speculation of an impending 50 bps interest rate cut on September 18, informed by comments from former New York Federal Reserve President Bill Dudley.

Meanwhile, the trading volumes of ETFs were flat. The weekly volumes were at $8 billion, short of the year-to-date average of $14.2 billion.

By region, the United States dominated the inflows into digital asset investment products, with a $416 million inflow. Europe was the next closest in positive activity, with Switzerland netting an intake of $27 million and Germany $10.6 million. Meanwhile, small outflows were seen in Canada, amounting to $18 million in net outflow.

Bitcoin Sees Strong Inflows, Ethereum Faces Continued Outflows

Bitcoin was the major beneficiary of this shift and received all of the $436 million in inflows. This comes after a significant stretch of 10 days of outflows that saw the cryptocurrency lose $1.18 billion. The trend also reversed for short-bitcoin products, which recorded $8.5 mln of outflows after three weeks of inflows.

Meanwhile, Ethereum continued to have a bad time, posting losses of $19 million. Market analysts say this is partly because of the selloffs linked to concerns about the profitability of Layer 1, particularly after news that involved Decun. Solana has had an extended good run with its fourth consecutive week of inflows, amounting to a total of $3.8 million in total inflows.

Along with cryptocurrencies, blockchain equities saw renewed interest, with inflows of $105 million. This was, in turn, after the launches of a number of new ETFs in the United States further pushed up momentum.