Crypto Funds See $921M Inflows As Inflation Data Fuels Rally

Cryptocurrency investment products regained momentum last week as investor confidence improved following lower-than-expected US inflation data.

Crypto exchange-traded products (ETPs) saw $921 million of inflows last week, more than offsetting the $513 million in outflows from the week before, CoinShares reported Monday.

The main driver behind the bullish trend in the crypto fund market was renewed confidence in further US rate cuts, bolstered by lower-than-expected CPI data released on Friday, according to CoinShares’ head of research, James Butterfill.

“The ongoing US government shutdown, and the resulting absence of key macroeconomic data, has left investors with little guidance on the direction of US monetary policy,” Butterfill wrote, adding that CPI data helped restore anticipation of the further rate cuts.

Bitcoin tops inflows — Ether turns negative

Bitcoin (BTC), which had been the main driver of outflows a week earlier, almost fully recovered those losses with $931 million in inflows last week.

Ether (ETH) saw outflows for the first time in five weeks, totaling $169m, with consistent daily outflows throughout the week. “Despite this, 2x leveraged ETPs remain popular,” CoinShares’ Butterfill noted.

Other altcoin ETPs, including Solana (SOL) and XRP (XRP), saw a slowdown in weekly inflows ahead of the US exchange-traded fund (ETF) launches, recording $29.4 million and $84.3 million in inflows, respectively. In particular, Solana ETP inflows fell more than 81% from the previous week.

Bitcoin’s $931 million inflow last week brought total inflows since the US Federal Reserve started cutting rates in September to $9.4 billion, Butterfill said.

Related: Bitcoin ETF apathy is pressuring a key Bitcoin support level

Despite billions in recent inflows, Bitcoin funds’ year-to-date total stood at $30.2 billio, or around 38% below the $41.6 billion recorded last year, he added.

Overall, total assets under management in crypto funds reached $229 billion, with $48.9 billion in inflows so far this year.