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Crypto Inflows Surge with $436 Million as Rate Cut Speculation Intensifies
Coinspeaker
Crypto Inflows Surge with $436 Million as Rate Cut Speculation Intensifies
The crypto market experienced a sudden change after weeks of steady downtrend, with investment products gaining $436 million in the second week of September 2024, according to CoinShares. This uptick marks a major shift following $1.2 billion in withdrawals during the prior weeks. Investors are speculating on a possible 50-point interest rate cut by the Federal Reserve, set for announcement on September 18.
Source: CoinShares
Comments from former New York Fed President Bill Dudley significantly influenced market sentiment. His insights have boosted investor confidence, prompting many to revisit their positions, particularly in Bitcoin. CoinShares’ head of research, James Butterfill, noted that this shift has strongly impacted capital flows.
Bitcoin Takes the Lead with $436 Million InflowsBitcoin BTC $58 647 24h volatility: -0.7% Market cap: $1.16 T Vol. 24h: $28.16 B , once again, stands as the top gainer, securing $436 million in inflows, effectively reversing a streak of 10 consecutive days of outflows that totaled $1.18 billion. On the flip side, short Bitcoin products designed for bearish bets on the cryptocurrency saw outflows of $8.5 million after weeks of positive momentum, signaling a growing bullish sentiment among traders.
While Bitcoin thrived, Ethereum continued to face challenges. The second-largest cryptocurrency by market capitalization experienced $19 million in outflows. This decline was largely attributed to concerns surrounding the layer-1 protocol, particularly in the wake of the “Dencun” upgrade, which has raised questions about profitability in Ethereum-based ecosystems.
Regionally, the US dominated inflows with a hefty $416 million, followed by Switzerland with $27 million, and Germany contributing $10.6 million. However, despite this strong inflow, trading volumes in exchange-traded funds (ETFs) remained flat, registering only $8 billion for the week well below the year-to-date average of $14.2 billion.
In addition to the cryptocurrency inflows, blockchain equities also received a boost, with $105 million in inflows. This surge has been linked to the introduction of new ETFs in the US market, further highlighting the growing investor confidence in the broader blockchain and crypto asset space.
Ethereum Faces Outflows while Solana ShinesMeanwhile, Solana SOL $132.4 24h volatility: 0.2% Market cap: $62.04 B Vol. 24h: $1.81 B continued its streak of positive inflows, marking the fourth consecutive week of capital inflow with $3.8 million. Solana’s consistent performance starkly contrasts Ethereum’s recent challenges and indicates increasing interest in alternative layer-1 solutions.
The resurgence of inflows into crypto products and blockchain equities reflects renewed optimism in the market. The anticipated rate cut from the Federal Reserve is expected to loosen financial conditions, which could further benefit the digital asset space. While Ethereum continues to face headwinds, the broader cryptocurrency ecosystem is positioned to gain from macroeconomic shifts.
As investors await the Fed’s final decision, the market remains in flux, but optimism is evident in these latest figures, with Bitcoin at the forefront of this resurgence.
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