Bitcoin Rebounds with $436M Net Inflows Amidst Market Surge in Expectations

• Crypto funds at major asset managers such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares saw a resurgence, with global net inflows reaching $436 million last week, based on CoinShares data.
• This shift ended a two-week streak of net outflows, driven by changing market expectations for a possible 50 basis point interest rate cut on September 18, according to James Butterfill, Head of Research at CoinShares.
• Trading volume remained relatively stagnant at $8 billion, significantly lower than the 2024 average of $14.2 billion, as noted by Butterfill in a Monday report.

The latest spike in crypto fund inflows reflects shifting market dynamics and investor sentiment, focusing on a predicted interest rate cut.

Renewed Investor Confidence in Bitcoin Funds

The spotlight was primarily on Bitcoin-based funds, which saw net weekly inflows of $436 million after enduring a 10-day phase of net outflows amounting to $1.2 billion. This renewed confidence suggests that investors are drawing back to Bitcoin amid evolving market expectations.

Global Distribution of Inflows

U.S.-based spot Bitcoin exchange-traded funds took the lead in this resurgence, contributing $403.9 million to the net weekly inflows. Meanwhile, Switzerland and Germany-based funds also performed positively, recording net inflows of $27 million and $10.6 million, respectively. Contrarily, Canada-based products faced net outflows totaling $18 million, indicating regional disparities in investment trends.

Mixed Performance Among Altcoins

Solana investment products continued their positive streak, marking the fourth consecutive week of net inflows totaling $3.8 million. However, Ethereum-based funds continued to lag, experiencing $19 million in net outflows last week, compounding the previous week’s $98 million outflows. The decreasing ratio between Bitcoin and Ether, reaching below 0.04 for the first time since April 2021, underscores Ethereum’s recent struggles.

Conclusion

The latest inflow figures underscore a renewed investor confidence in crypto assets, particularly in Bitcoin, spurred by favorable expectations regarding future interest rate cuts. Nevertheless, the lingering outflows from Ethereum-focused funds indicate ongoing challenges in the altcoin segment. Moving forward, the investment landscape will likely be shaped by macroeconomic indicators and regional investment behaviors.