Crypto Investment Products Attract Inflows for Second Consecutive Week, Totaling $321M

Crypto investment products from asset managers including BlackRock, Grayscale, Fidelity, and 21Shares, attracted net inflows of $321 million last week, marking the second consecutive week of inflows. During the week prior, the products witnessed larger net inflows, totaling $436 million.

Reacting Positively to Fed’s Rate Cut 

According to CoinShares head of research James Butterfill, the latest weekly inflow of $321 million was likely driven by the Federal Open Market Committee’s (FOMC) decision to cut interest rates by 50bps.

“This surge was likely driven by the Federal Open Market Committee (FOMC) comments last Wednesday, which took a more dovish stance than anticipated, including a 50 basis point interest rate cut,” he said.

He added that the dovish stance also led to a 9% increase in assets under management (AuM) for the products, with trading volume also up 9% from the previous week to $9.5 billion last week.

According to the report, investment products linked to Bitcoin were the primary beneficiaries, attracting net inflows of $284 million last week. Moreover, the recent price surge of the leading digital asset also brought in inflows of $5.1 million into short-bitcoin investment products.

Ethereum-Based Products Continues Sell-Off

On the other hand, Ethereum-based products continue to be an outlier, recording net outflows for the fifth straight week, totaling $29 million last week alone. Butterfill attributed this sell-off to consistent outflows from Grayscale Ethereum Trust (ETHE) and weaker inflows from newly issued spot Ether ETFs. Grayscale’s ETHE has experienced a historical net outflow of $2.8 billion against $2.2 billion net inflows from newly issued spot Ether ETFs.

Solana-based investment products extended their inflows streak to five consecutive weeks, with inflows last week alone totaling $3.2 million.

Meanwhile, weekly inflows were mixed from a regional perspective. The US saw the largest inflows, totaling $277 million, while Switzerland saw its second largest weekly inflows of the year at $63 million. In contrast, Germany, Sweden, and Canada experienced weekly negative flows of $9.5 million, $7.8 million, and $2.3 million, respectively.