Last week, digital asset funds experienced an impressive inflow of $1.2 billion, marking the highest amount since the week of July 19. This information comes from a report published by crypto asset management firm CoinShares. This latest inflow also marks the third week in a row that digital asset funds have seen positive movement, which analysts have connected to growing expectations that the U.S. may lower interest rates soon.
According to the report, most of the new funds, around $1.17 billion of the $1.2 billion total, were funneled into U.S.-based investments. This significant increase is largely attributed to a growing positive outlook for investment opportunities, especially in the digital currency sector, as investors anticipate that lower interest rates could boost the market.
Largest Inflows Since July, Boosted by U.S. Funds
A big reason behind the rise in digital asset fund investments comes from a recent development in the U.S. Bitcoin exchange-traded fund (ETF) market. The Securities and Exchange Commission (SEC) recently approved options contracts tied to BlackRock’s Bitcoin ETF (IBIT), which is currently the largest Bitcoin fund in the U.S. measured by assets. This approval has improved investor sentiment toward the U.S. crypto market, leading to increased confidence in digital asset funds.
However, despite the positive mood, CoinShares pointed out that trading volumes did not see a significant rise. In fact, trading activity dropped slightly, by about 3.1% compared to the previous week. While the approval of these new investment options was a positive sign, it hasn’t yet translated into a substantial increase in overall trading activity.
Bitcoin Leads the Pack, Ether Breaks Losing Streak
Bitcoin funds stood out as the main driver behind the large inflows, attracting over $1 billion in new investments during the week. Meanwhile, Ether funds also had a notable week, bringing in $87 million. This was significant for Ether products as it marked the first time they saw measurable inflows in five weeks. The positive influx broke a losing streak that had been ongoing since early August, highlighting a renewed interest in Ethereum-based investments.
With these developments, it seems that the digital asset market, particularly in the U.S., continues to capture the attention of investors looking to capitalize on potential future gains, especially as the market anticipates further moves from the U.S. Federal Reserve.