Cryptocurrency funds stayed green last week, though inflows fell dramatically as crypto products experienced a record day of outflows following a hawkish speech from the Federal Reserve boss.
Speculators pumped a total of $308 million into funds over the course of last week, including into Bitcoin ETFs. But on Thursday, investors pulled out a record $576 million, data from European fund manager CoinShares shows. By Friday, that number had risen to $1 billion.
CoinShares said that the sudden shift with investors backtracking was “likely in response to the hawkish dot plot released” by the Federal Reserve. Such funds had added more than $3.2 billion worth of assets the previous week, which means inflows fell by more than 90% week-over-week.
America’s central bank last week cut interest rates—as expected—but the Fed’s chair, Jerome Powell, gave a speech saying that it would not cut as aggressively in 2025, spooking investors in the process. Assets like Bitcoin and other cryptocurrencies have historically performed better in a low interest rate environment.
Following the Fed’s speech, Bitcoin and other major assets dropped sharply. Bitcoin is now trading for $93,245 per coin, after dipping nearly 13% over a seven-day period, CoinGecko shows. Last Tuesday, it touched a new all-time high of little over $108,o00, just before the plunge.
XRP Demand Grows as Bitcoin, Ethereum Drive Billions to Crypto ETFs
A months-long torrent of cash continued apace last week, as digital asset investment products—including spot Bitcoin and Ethereum ETFs—saw $3.2 billion worth of inflows. Lifting year-to-date inflows to $44.5 billion, the figure clocked in at quadruple that of any year on record, according to data from CoinShares. In a Monday blog post, CoinShares Head of Research James Butterfill described the figure “astonishing”—with two weeks left to go in 2024. Representing the 10th straight week that digita...
CoinShares also said Monday that investors looking to get exposure to altcoins last week via exchange-traded products switched to Ethereum from Solana. Products giving exposure to Ethereum, the second-biggest digital coin, received $51 million in inflows, while Solana experienced $8.7 million in outflows.
Investment funds that track the price of cryptocurrencies have done particularly well following the U.S. presidential election of Donald Trump, as the President-elect ran on a campaign to help the digital asset industry.
Edited by Andrew Hayward
