Digital Asset Products See $321M Inflows Amid Fed Rate Cut

• Bitcoin dominates inflows; Ethereum sees a fifth consecutive week of outflows.
• U.S. leads inflows; Germany, Sweden, and Canada face net outflows.

Digital asset investment products experienced net inflows of $321 million for the second consecutive week, according to CoinShares. The surge was largely attributed to the U.S. Federal Reserve’s decision to cut interest rates by 50 basis points (bps), which was viewed as a dovish move by the market. Total assets under management (AuM) rose by 9%, while weekly trading volumes also increased by 9% to $9.5 billion.

Bitcoin-based products led the inflows, attracting $284 million last week. However, the bullish sentiment surrounding Bitcoin also drove net inflows of $5.1 million into short-Bitcoin products. It reflects continued interest in hedging strategies.

Meanwhile, Solana-based investment products maintained their positive streak, bringing in $3.2 million in net inflows, bolstered by announcements at the Solana Breakpoint conference in Singapore. 

Conversely, Ethereum-based products registered net outflows of $29 million, marking the fifth consecutive week of outflows for the second-largest cryptocurrency. 

Behind Inflows And Outflows

The ongoing Ethereum outflows were primarily linked to Grayscale’s Ethereum Trust, which has faced stiff competition from newly launched U.S. spot Ethereum ETFs. Since the trust’s inception in July, Grayscale has recorded $2.8 billion in outflows, compared to $2.2 billion in inflows into the spot ETFs.

Regionally, U.S.-based investment products led the inflows, with $277 million added. It is followed by Switzerland, which saw $63 million in net inflows, the second-largest weekly inflows this year. In contrast, Germany, Sweden, and Canada experienced outflows of $9.5 million, $7.8 million, and $2.3 million, respectively.

The continued inflows into digital asset products signal renewed interest following recent market volatility, particularly in the wake of the Federal Reserve’s monetary policy shift. Investors are closely monitoring further developments to gauge the long-term impact on digital assets.

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