Cryptocurrency Investment Products See Renewed Inflows Amid Inflation Data

According to Cointelegraph, cryptocurrency investment products experienced a resurgence in investor interest last week, driven by improved confidence following lower-than-expected U.S. inflation data. Crypto exchange-traded products (ETPs) recorded $921 million in inflows, effectively reversing the $513 million in outflows from the previous week, as reported by CoinShares on Monday. The primary catalyst for this positive trend in the crypto fund market was the renewed optimism regarding potential U.S. interest rate cuts, supported by the unexpectedly low Consumer Price Index (CPI) data released on Friday. James Butterfill, CoinShares’ head of research, noted that the ongoing U.S. government shutdown has left investors with limited guidance on the direction of U.S. monetary policy. However, the CPI data has rekindled expectations for further rate reductions. Bitcoin (BTC) led the inflows, recovering nearly all of the losses from the previous week with $931 million in inflows. In contrast, Ether (ETH) experienced outflows for the first time in five weeks, totaling $169 million, with consistent daily outflows throughout the week. Despite this, 2x leveraged ETPs remain popular, according to Butterfill. Other altcoin ETPs, such as Solana (SOL) and XRP (XRP), experienced a slowdown in weekly inflows ahead of the anticipated U.S. exchange-traded fund (ETF) launches, recording $29.4 million and $84.3 million in inflows, respectively. Notably, Solana ETP inflows decreased by more than 81% from the previous week. Bitcoin’s $931 million inflow last week increased the total inflows since the U.S. Federal Reserve began cutting rates in September to $9.4 billion. Despite the substantial recent inflows, Bitcoin funds’ year-to-date total stands at $30.2 billion, approximately 38% below the $41.6 billion recorded last year. Overall, total assets under management in crypto funds have reached $229 billion, with $48.9 billion in inflows so far this year.