Bitcoin Sees $436 Million Inflows in Crypto Investment Surge While Ethereum Falters

Global crypto investment products experienced a notable resurgence last week, according to the most recent report from CoinShares. The report revealed that these products attracted $436 million in net inflows, a significant turnaround driven primarily by Bitcoin’s resurgence. This positive development marked a shift back to positive flows following two consecutive weeks of net outflows.

Key players such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares played a pivotal role in driving these positive flows, signaling a renewed interest in crypto investment products.

Bitcoin-based funds led the rebound, with $436 million in net inflows after a 10-day streak of outflows totaling $1.2 billion. This shift reflected a strong reversal in investor sentiment towards Bitcoin, particularly in the US market. Notably, spot Bitcoin exchange-traded funds (ETFs) based in the United States contributed significantly to the inflows, accounting for $403.9 million in net weekly inflows.

In European markets, Switzerland and Germany-based funds saw positive trends, recording net inflows of $27 million and $10.6 million, respectively. However, Canada-based products experienced net outflows of $18 million, diverging from the overall positive trend.

Short Bitcoin investment products, after three consecutive weeks of inflows, reversed their trend by registering net outflows of $8.5 million. This shift may indicate a change in investor strategies, suggesting a return of confidence to the market.

Furthermore, Solana investment products witnessed net inflows of $3.8 million for the fourth consecutive week, signaling a growing interest in alternative cryptocurrencies beyond Bitcoin.

The rebound in market sentiment was attributed to changes in market expectations regarding potential interest rate cuts, as highlighted by CoinShares Head of Research James Butterfill. The surge in inflows towards the end of the week was driven by shifting market expectations for a potential 50 basis point interest rate cut on September 18th, following comments from former NY FED President Bill Dudley.

Despite the recovery, trading volume across crypto investment products remained flat at $8 billion for the week, significantly lower than the 2024 average of $14.2 billion. While Bitcoin-based funds drove the rebound, Ethereum-based funds continued to face challenges, experiencing another week of net outflows, reflecting varying investor sentiments within the crypto market.

The CoinShares report indicated net outflows of $19 million from Ethereum funds in the past week, adding to the $98 million in negative flows reported the previous week. This data suggests a nuanced landscape within the crypto market, with different digital assets experiencing diverging trends in investor interest.