The Impact of Interest Rate Cut on the Crypto Market 321 Million Inflow

CoinShares reported that the total assets under management (AuM) of Crypto asset ETPs increased by 9% to reach $85.8 billion, thanks to the influx of investors. According to CoinShares’ latest weekly report, digital asset investment products saw capital inflows for the second consecutive week, with investors pouring in $321 million into the industry. This surge in investment led to a 9% increase in the AuM of Crypto asset ETPs, reaching $85.8 billion. The total trading volume of investment products also rose to approximately $9.5 billion. CoinShares’ Research Director, James Butterfill, attributed this positive trend to the recent decision by the Federal Reserve to cut interest rates by 50 basis points. He explained, “This surge is likely driven by the comments from the Federal Open Market Committee (FOMC) last Wednesday, which took a more dovish stance than expected, including a 50 basis point cut.” The breakdown of fund flows showed that investment products based on BTC led the inflows, generating a net gain of $284 million globally last week. Notably, major Crypto asset funds from companies such as BlackRock, Bitwise, Fidelity, ProShares, and 21Shares contributed to this rebound, with a combined net inflow of $321 million. The positive price momentum of BTC also attracted investors betting against BTC, who put $5.1 million into short BTC funds. Ethereum faced capital outflows for the fifth consecutive week, totaling $29 million. This trend was driven by the continuous outflow of funds from Grayscale’s ETHE product and a decline in interest for new products. According to Farside data, the outflows from ETHE ranged between $13 million and $18 million for three consecutive days last week, surpassing the slight inflows from other products, including Grayscale’s Mini Trust. Meanwhile, Solana maintained its positive trend with a $3.2 million influx of funds last week. This inflow is also related to several traditional financial institutions announcing plans to launch financial services on the Solana network during the recent Solana Breakpoint event in Singapore. Other large-cap alternative assets, including XRP and LTC, saw a combined inflow of $300,000. In terms of regions, the United States unsurprisingly became the main contributor to last week’s capital inflows, accounting for $277 million, followed by Switzerland with $63 million. In contrast, Germany, Sweden, and Canada saw outflows of $9.5 million, $7.8 million, and $2.3 million respectively.