Crypto investment products saw $352 million in outflows over the past week, while trading volumes plummeted by 27%. However, the year-to-date (YTD) inflows remain robust at $35.2 billion.
According to CoinShares’ latest Digital Asset Fund Flows Weekly Report, despite weaker payroll figures and greater prospects for a September interest rate cut in the US, crypto products struggled to attract or even retain their inflows.
Among the crypto products, Bitcoin-based (BTC) products were successful in attracting $524 million in funds on a net basis. Data from SoSoValue shows that $144 billion worth of BTC – representing almost 6.5% of total market cap – is tied up in BTC investment products.
Meanwhile, it was Ethereum (ETH) products that led the net outflows, witnessing $912 million in outflows last week. In sharp contrast to the trend the week prior, these products saw outflows every day for the last seven trading days.
Despite last week’s net outflows, Ethereum exchange-traded products (ETPs) inflows remain elevated at $11.2 billion for the year. Total value tied in US spot ETH exchange-traded products (ETPs) currently stands at $27.64 billion.
Other altcoins – such as Solana (SOL) and XRP – also saw steady inflows, attracting $16.1 million and $14.7 million in inflows, respectively. Recent reports suggest that regulated XRP spot exchange-traded funds (ETFs) are nearing launch in the US.
In terms of countries, the US saw $440 million in outflows, while Germany and Hong Kong witnessed $85.1 and $8.1 million in inflows, respectively. Other countries such as Australia, Brazil, and Canada, recorded inflows as well.
The recent beating taken by crypto ETPs signals waning interest in digital assets. However, the price of leading cryptocurrencies such as BTC and ETH continues to hover close to their latest all-time highs (ATHs), hinting that high net outflows from crypto ETPs may be temporary.
Recently, institutional adoption of Bitcoin reached another milestone as the total BTC held by public companies surged past one million. Meanwhile, ETH also continues to witness rapid adoption as an increasing number of firms embrace the top smart contract platform.
Bullish triggers – such as the US Federal Reserve (Fed) slashing interest rates – are likely to benefit risk-on assets, including cryptocurrencies. Latest estimates from FedWatch Tool give an 88.4% chance of the Fed cutting interest rates by 25 basis points later this month.
Since their launch in 2024, spot Bitcoin ETFs have experienced tremendous growth. Recent analyses predict that Bitcoin ETFs are likely to surpass their gold counterparts in the future.
That said, it would be prudent to avoid over enthusiasm, as the Bitcoin mining industry is suffering since BTC’s last halving in 2024. If things don’t change soon, miners may increase Bitcoin selling pressure. At press time, BTC trades at $112,481, up 1.4% in the past 24 hours.
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