Digital asset investment products recorded a second straight week of inflows, with $1.9 billion entering the market, according to CoinShares.
The move followed the US Federal Reserve’s 25 basis point rate cut last week. Investors initially reacted cautiously to what was described as a “hawkish cut,” but by Thursday and Friday, inflows accelerated, reaching $746 million in just two days.
Total assets under management climbed to $40.4 billion, the highest level this year and moving closer to last year’s peak of $48.6 billion. The United States accounted for the bulk of flows, with $1.8 billion, while Germany added $51.6 million, Switzerland $47.3 million, and Brazil $9.3 million. Hong Kong, however, reported small outflows of $3.1 million, showing mixed sentiment across regions.
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Bitcoin remained the primary driver, attracting $977 million in inflows last week. Meanwhile, Short-Bitcoin products continued to lose ground, losing $3.5 million in outflow and reducing their assets under management to $83 million, the lowest in years.
Ethereum also gained sharp interest, attracting $772 million, and bringing its inflows this year to $12.6 billion. This sent Ethereum’s assets under management to an all-time high of $40.3 billion.
Other noteworthy inflows were also observed in Solana at $127.3 million and XRP at $69.4 million, showing that altcoins still had support in spite of BTC and Ethereum dominating the week’s action.
Meanwhile, Binance data from CryptoQuant showed BTC open interest rose 4.7% after the ruling was made by the Fed. Open interest before the ruling was $12.8 billion on Binance.
24 hours later, it was at $13.4 billion. Since Binance is the largest exchange in terms of having $44 billion in open interest, this type of spike is an indication of favorable institutional positioning.
Inflows indicate new confidence, and trading flows indicate shifting momentum. Bitcoin has traded sideways in recent months, and this has sent trading to Ethereum and other altcoins.
This rotation has been slowing down as trading volumes’ dominance has been weakening from Ethereum, and withdrawal signs have been increasing.
Analysts note today’s long rotation has reached an end, and Bitcoin is in a tight range. The cut down by the Fed in due course can bring an impetus to a whole move, but at present, caution dominates.
The inflows have returned, and open interest also climbs, and Bitcoin’s future trend can be established in the weeks to come.
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