Coinspeaker
Crypto Inflows Jump to $436 Million as Speculation Grows Over Rate Cuts
After several weeks of consistent decline, the crypto market saw a significant turnaround in the second week of September 2024, with investment products attracting $436 million, as reported by CoinShares. This surge represents a substantial change from the $1.2 billion in outflows experienced in previous weeks. Investors are currently speculating about a potential 50 basis point interest rate reduction by the Federal Reserve, which is expected to be announced on September 18.
Source: CoinShares
Market sentiment has been notably influenced by comments from former New York Fed President Bill Dudley, whose views have restored investor confidence and encouraged many to reevaluate their positions, particularly in Bitcoin. James Butterfill, the head of research at CoinShares, emphasized that this change has had a significant effect on capital flows.
Bitcoin Leads with $436 Million in Inflows
Bitcoin
BTC
$57,783
24h volatility:
-3.9%
Market cap:
$1.14 T
Vol. 24h:
$30.63 B
stands out as the leading gainer, attracting $436 million in inflows, effectively reversing a streak of 10 consecutive days of outflows totaling $1.18 billion. Conversely, short Bitcoin products intended for downcast speculation faced outflows of $8.5 million after a period of positive growth, indicating a rising bullish sentiment among traders.
While Bitcoin thrived, Ethereum encountered difficulties, with the second-largest cryptocurrency by market cap experiencing outflows of $19 million. This drop was primarily due to concerns regarding the layer-1 protocol, especially in light of the “Dencun” upgrade raising doubts about profitability in Ethereum’s ecosystem.
Regionally, the US led the inflows with an impressive $416 million, followed by Switzerland with $27 million, and Germany contributing $10.6 million. Nonetheless, despite this robust inflow, trading volumes in exchange-traded funds (ETFs) remained stagnant, recording only $8 billion for the week, significantly below the year-to-date average of $14.2 billion.
Aside from the cryptocurrency inflows, blockchain equities also witnessed an increase, netting $105 million in inflows. This growth has been associated with the launch of new ETFs in the US market, highlighting the escalating investor confidence in the broader blockchain and crypto asset landscape.
Ethereum Faces Outflows While Solana Shines
In the meantime, Solana
SOL
$130.7
24h volatility:
-3.5%
Market cap:
$61.22 B
Vol. 24h:
$2.17 B
continue to enjoy a wave of positive inflows, marking four consecutive weeks of capital growth with $3.8 million. Solana’s ongoing success starkly contrasts with Ethereum’s recent setbacks, indicating a rising interest in alternative layer-1 solutions.
The recent influx of capital into crypto products and blockchain equities signifies renewed optimism in the market. Anticipated rate cuts from the Federal Reserve could ease financial conditions, potentially benefiting the digital assets sector further. While Ethereum navigates its challenges, the broader cryptocurrency ecosystem stands to gain from economic shifts.
As investors await the Fed’s ultimate decision, the market remains dynamic, but signs of optimism are reflected in the latest figures, with Bitcoin leading this upturn.
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Crypto Inflows Jump to $436 Million as Speculation Grows Over Rate Cuts
