Cryptocurrency investment products have seen significant inflows following the US Federal Reserve’s decision to lower interest rates, according to CoinShares, a crypto investment firm. During the week of September 15 to September 21, digital asset investment products experienced a second consecutive week of inflows, amounting to $321 million. While this figure is slightly lower than the previous week’s inflows of $436 million, the surge can be attributed to the Federal Open Market Committee’s (FOMC) decision to cut interest rates by 50 basis points (bp). CoinShares stated in its weekly report that Bitcoin-based investment products received the majority of attention, with inflows totaling $284 million. The report also highlighted a growing interest in short-Bitcoin investment products, which saw inflows of $5.1 million. On the other hand, Ethereum-based investment products experienced outflows for the fifth consecutive week, totaling $29 million. CoinShares attributed this to persistent outflows from the Grayscale Ethereum Trust (ETHE) and insufficient inflows from newly issued exchange-traded funds. Solana (SOL) investment products, on the other hand, saw consistent weekly inflows of $3.2 million. The FOMC’s rate cut has had a positive impact on the crypto markets, with total assets under management and investment product volumes increasing by 9%. This is in contrast to some analysts’ predictions, as historical data showed that Bitcoin and other risk-on assets tend to perform well during non-recessionary rate cut cycles. In response to the rate cut, investors have also been buying gold, which has reached new all-time highs. On September 23, the spot gold price hit a record high of $2,629 per ounce, with a gain of over 5% in the past two weeks. Bas Kooijman, CEO and asset manager of DHF Capital, believes that the rate cut could extend the uptrend in gold prices and fuel appetite for assets like gold. He further suggested that the size of the cut could lead to more aggressive actions in the coming months.
Bitcoin Drives 321M in Crypto Inflows After Fed Lowers Rates