Crypto Investment Products Rebound $436M, Bitcoin Soars

• Crypto investment products printed a stunning comeback last week.
• Bitcoin led the inflows as US investors anticipated a Federal Reserve interest rate cut.

Global crypto investment products rebounded last week, with net inflows reaching $436 million. While Bitcoin (BTC) Exchange-Traded Funds (ETFs) led the charge, funds from Ethereum (ETH) continue to struggle.

Resurgence in Global Crypto Investment Products

A recent CoinShares report revealed that the rebound in crypto investment products comes after outflows reached $1.2 billion. Specifically, crypto funds issuers, including Fidelity Investments, Ark Invest, Bitwise, and ProShares, were the sole contributors to the $436 million weekly net inflows.

Fidelity’s ETF product surprisingly clinched the top spot with weekly inflows of $218 million. Next on the list was Cathie Wood’s Ark Invest, with net inflows of $83 million. Other notable contributors include Bitwise and Proshares ETF. 

CoinShares Head of Research James Butterfill said the rising inflows can be attributed to expectations of a potential rate cut from the US Federal Reserves this week. Following comments from former NY FED President Bill Dudley, many market participants forecast a 50 basis point interest rate cut on September 18. The confidence in this rate cut stems from related moves from the Bank of England (BoE) and other major central banks.

Across jurisdictions, the US recorded the highest spot Bitcoin ETF inflows, totaling $416 million for the week. Funds in Switzerland and Germany also saw substantial inflows of $27.1 million and $10.6 million respectively. On the other hand, Canada and Sweden saw outflows of $17.9 million and $4.6 million respectively.

Although global crypto investment products recorded inflows, trading volumes in ETFs for the week were flat at $8 billion. This figure is much lower than the average $14.2 billion recorded this year.

Bitcoin was the main focus, seeing $436 million in inflows after a 10-day streak of outflows totaling $1.18 billion. Still, short Bitcoin flows reversed with outflows of $8.5 million after three weeks of inflows. 

Solana investment products also witnessed net inflows of $3.8 million last week, the fourth week of consecutive inflows.

Ethereum Continues to Witness Downturn

Unlike Bitcoin’s positive performance, many Ethereum-based funds had a hard time last week. Collectively, these funds generated outflows worth $19 million last week, adding to the $98 million in outflows recorded last week. According to TradingView, the ratio between Bitcoin and Ethereum fell below 0.04 over the weekend for the first time since April 2021.

As our report previously mentioned, investors have withdrawn over $500 million since the launch of the Ethereum ETFs. This massive capital outflow has increased market volatility, making liquidity a serious concern when profiling financial instruments.

Ethereum was trading for $2,309 as of this writing, demonstrating a 4.36% decline in 24 hours. However, the trading volume increased by more than 123%. The uptick in trading volume indicates investors’ willingness to buy the coin despite price fluctuations.