Originally published on: August 26, 2024
Cryptocurrency investors are showing increased interest in Bitcoin-related exchange-traded products (ETP) as concerns over potential interest rate cuts in September heighten.
Record Inflows of $533 Million Reported
CoinShares, a prominent crypto investment firm, disclosed on Aug. 26 that digital asset investment products witnessed a weekly inflow of $533 million from Aug. 18 to Aug. 24. This surge in purchases marks the largest inflow in the last five weeks and is fueled by speculations of interest rate cuts in the United States following Federal Reserve Chair Jerome Powell’s suggestion of potential rate cuts in September.
Bitcoin ETPs Leading the Charge
Among the diverse range of crypto investment products scrutinized by CoinShares, Bitcoin-related ETPs emerged as the top choice last week, attracting $543 million in inflows. Notably, BlackRock’s iShares Bitcoin Trust (IBIT) stood out with an impressive $318 million in inflows during the same period.
Ether Products Experience Outflows
In contrast to the buoyant Bitcoin market, investments in Ether-related crypto products witnessed negative flows, with outflows totaling $36 million over the period. Despite new ETH ETF issuers gaining inflows, the Grayscale Ethereum Trust (ETHE) offset this trend with outflows amounting to $118 million.
BTC Price Surges Amid Inflows
The influx of investments seems to have propelled the Bitcoin price to new heights, with BTC gaining approximately 8% in value, jumping from $59,500 on Aug. 18 to $64,300 by Aug. 24. Nonetheless, over the last 30 days, the cryptocurrency has seen a 6% decline from its peak of $69,900 on July 29.
New Stablecoins Minting Influencing Bitcoin’s Surge
Matrixport, a crypto financial services platform, pointed out that the active minting of new stablecoins like Tether is a significant driver behind Bitcoin’s recent surge. This development suggests that institutional influence is outweighing macroeconomic factors in the crypto market dynamics.
Amid this investment upswing, it is noteworthy that the latest inflows, although exceeding $500 million after five weeks, have not surpassed historical records. The peak of inflows was observed in March 2024, coinciding with Bitcoin’s historical high of $73,600.
As the interest in cryptocurrency investments continues to soar, the market awaits further developments and a potential boom in the crypto landscape.
