For the second week in a row, digital asset investment products received a substantial influx of $932 million, driven by expectations of interest rate cuts. The majority of this increase occurred during the final three trading days, accounting for 89% of the total weekly inflow, following a report that revealed lower-than-anticipated Consumer Price Index (CPI) figures.
Despite this surge, the weekly trading volume remained significantly lower at $10.5 billion compared to $40 billion in March. This reflects a reevaluation of Bitcoin prices that are closely linked to expectations regarding interest rates.
In terms of regional dynamics and institutional interest, statistics from CoinShares indicate that the United States emerged as a dominant player, experiencing an impressive inflow of $1.002 billion. In a noteworthy turn of events, Grayscale Investments saw its first inflows since January, amounting to $18 million. This marks a remarkable shift after enduring outflows of $16.6 billion triggered by the launch of its exchange-traded fund (ETF). Meanwhile, Switzerland and Germany in Europe recorded modest inflows of $27 million and $4.2 million, respectively. However, the markets in Hong Kong and Canada faced outflows, losing $83 million and $17 million, respectively.
Bitcoin led the charge with substantial inflows totaling $942 million, while positions betting against Bitcoin saw minimal activity, indicating a bullish sentiment among investors. Among alternative cryptocurrencies, Solana, Chainlink, and Cardano were notable beneficiaries, receiving inflows of $4.9 million, $3.7 million, and $1.9 million, respectively. On the other hand, Ethereum faced a challenging week, experiencing outflows of $23 million due to ongoing concerns about the potential approval of a spot-based ETF by the Securities and Exchange Commission (SEC).
The broader blockchain sector continued to face challenges, as equity funds related to blockchain technology saw outflows for the 14th week out of 20 this year, resulting in a cumulative total of $512 million in outflows year-to-date. This trend highlights investors’ cautious approach due to regulatory uncertainties and market volatility.
