Crypto ETPs register $1.9B inflows as Bitcoin ETFs extend streak
TL;DR Breakdown
- Crypto ETPs registered a second consecutive week of inflows, recording $1.9 billion in inflows.
- Bitcoin and Ethereum were the biggest contributors to the weekly inflows.
- CoinShares’ head of research sees the inflows as the perfect response to the Fed’s interest rate cut.
Crypto exchange-traded products (ETPs) recorded a second consecutive week of inflows last week, extending the $3.3 billion in gains that they registered the week before. According to data shared by CoinShares on Monday, crypto ETPs registered inflows of about $1.9 billion over the past week.
The report mentioned that Bitcoin and Ethereum led the market, adding inflows of $977 million and $772 million, respectively. Meanwhile, Solana also saw a strong demand, committing inflows of $127 million, and XRP made up the list, seeing inflows of $69 million. With the new gains, the total asset under management (AUM) in global crypto ETPs jumped to a new high of $40.4 billion year-to-date, James Butterfill, CoinShares’ head of research, said.
Crypto ETPs experience second consecutive week of inflows
Bitcoin funds maintained the momentum it showed last week, attracting the largest share of inflows after topping the chart in terms of gains with $2.4 billion in inflows the previous week. The latest inflows signified the fourth straight week of gains for Bitcoin exchange-traded funds (ETFs), bringing the total in the period to about $3.9 billion, according to SoSoValue.
In contrast, short-Bitcoin ETPs are still struggling, registering outflows of about $3.5 billion and total AUM dropping to a multi-year low of $83 million. Ethereum ETPs also witnessed strong demand over the past week, with new inflows pushing the year-to-date total to a record $12.6 billion, according to data shared by CoinShares.
The reports of new inflows into crypto funds come amid the decision of the United States Federal Reserve to slash key US interest rates last Wednesday, marking its first of the year. The rate cut came after months of the United States President urging the Fed to cut rates. While the president and some major stakeholders were convinced about the move, Fed chairman Jerome Powell was not convinced about the need to cut rates.
Speaking after the announcement, Powell wasn’t too animated and kept things brief. Even though journalists tried to ask him about the pressure from the Trump administration, he shut down most of the questions, including criticisms directed at him from Treasury Secretary Scott Bessent. “I, of course, I’m not going to comment on anything the Secretary says or really any other officer says,” he said at the press conference.
He also refused to reveal what his next plans are after giving the president what he has wanted all along. When asked if he was going to step down when his term ends in May, Powell mentioned that there was no new information regarding that. After a journalist asked about Lisa Cook and Trump’s push to remove her from the board, Powell said, “You know, I see it as a court case that it would be inappropriate for me to kind of comment on.”
Meanwhile, CoinShares’ Butterfill sees the inflows as a positive response to the interest rate cut despite initial caution from investors. “After months of speculation, the US Federal Reserve cut interest rates last week. Although investors initially reacted cautiously to the so-called ‘hawkish cut’, inflows resumed later in the week,” Butterfill said.
Following the rate cut, spot crypto prices saw slight volatility, with Bitcoin closing up to multi-week highs above $117,000 on Thursday. Ethereum also benefited a little, with the asset rising above $4,600 on Thursday after starting the week at $4,500. However, despite strong inflows and rising prices, the investors’ sentiment remained cautious last week, according to the Crypto Fear & Greed Index, a metric that measures the overall sentiment of the crypto market. Last week, the Index was neutral with a score of 53. Today, it has dropped to fear with a score of 45.
