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Digital asset investment products saw significant inflows amounting to $932 million for the second week.
The inflows were a direct response to the lower-than-anticipated Consumer Price Index (CPI) report published on Wednesday, according to CoinShares in a report released on Monday.
The report highlighted that the last three trading days of the week represented 89% of the total inflows, demonstrating a clear link between Bitcoin prices and expectations regarding interest rates.
Despite the rise in inflows, trading volumes remained relatively subdued at $10.5 billion for the week, in contrast to $40 billion in March.
US Leads Regional Inflows in Digital Asset Products
The United States led the regional inflows, with $1.002 billion entering the market last week.
Notably, Grayscale, which had faced considerable outflows of $16.6 billion since the ETF’s launch in January, recorded minor inflows of $18 million for the first time.
Switzerland and Germany also experienced minor inflows of $27 million and $4.2 million, respectively.
Conversely, Hong Kong and Canada saw outflows of $83 million and $17 million, respectively.
As reported by CoinShares, digital asset investment products attracted inflows of up to $932 million last week, primarily due to market anticipations of interest rate reductions. Bitcoin inflows totaled $942 million, while Ethereum faced outflows of $23 million. https://t.co/qOxsPMz0oY
— Wu Blockchain (@WuBlockchain) May 20, 2024
Bitcoin drew in $942 million in inflows, while there were nearly no flows into short Bitcoin, reflecting a favorable outlook among investors.
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Several altcoins also garnered significant inflows, with Solana, Chainlink, and Cardano leading with $4.9 million, $3.7 million, and $1.9 million, respectively.
In contrast, Ethereum continued to experience negative sentiment due to uncertainties regarding the Securities and Exchange Commission’s (SEC) approval of a spot-based ETF, leading to additional outflows of $23 million.
On the other hand, blockchain equities faced ongoing outflows, with only six out of the 20 weeks this year recording inflows.
Year-to-date, these equities have experienced a total outflow of $512 million, indicating a cautious stance from investors in this area.
Renewed Interest in Spot Bitcoin ETFs
Bitcoin concluded the week positively, closing at approximately $66,300, marking a 7.8% increase from the previous week’s closing figure of around $61,500.
The week exhibited relatively low volatility, with most of the price increase occurring on Wednesday, while the remainder of the week remained stable.
A key factor contributing to last week’s price rise was the renewed interest in BTC Spot ETFs, as noted by Matteo Greco, a research analyst at digital asset investment firm Fineqia International, in a recent commentary.
After five weeks of diminished demand, resulting in about $1 billion in cumulative net outflows, BTC Spot ETFs experienced roughly $950 million in net inflows.
Grayscale’s ETF (GBTC), which transitioned from a trust to an ETF in January 2024, recorded its first weekly net inflow.
Trading volume for Bitcoin ETFs remained steady, with a total trading volume of $262.6 billion since inception, and $8.6 billion recorded during the week.
These figures are consistent with recent weeks, as daily trading volume fluctuated between $1.5 to $2 billion, following a period of exceptionally high trading activity in February and March.
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