Bitcoin inflows surge as Ethereum funds outflow
Last week, Bitcoin (BTC) investment products witnessed significant inflows totaling $436 million, while Ethereum (ETH) investment products experienced a withdrawal of $19 million, as documented by CoinShares, a prominent asset management company. The cryptocurrency investment sector as a whole saw inflows amounting to $436 million last week, a notable recuperation from $1.2 billion in outflows.
Moreover, investment products targeting short positions in Bitcoin saw an exodus of $8.5 million in capital, marking a shift after three weeks of continuous inflows. This influx into BTC-related instruments halted a trend of outflows that persisted for 10 days, cumulatively nearing $1.2 billion, according to the analysis conveyed in the report.
Conversely, the lag in Ethereum-centric funds is being associated with rising apprehensions about the profitability on its mainnet subsequent to the Dencun upgrade, implemented on March 13 this year. This upgrade significantly lowered transaction fees for Ethereum-based layer-2 blockchains.
Following this upgrade, the expenses for L2 solutions to utilize Ethereum for data storage plummeted by up to 99.6% in 2024, as unveiled by growthepie’s statistics. Furthermore, Token Terminal's figures indicate that the weekly earnings of Ethereum have dipped to their lowest for this year since August 12, averaging $4.56 million.
Despite Ethereum's challenges, Solana experienced its fourth consecutive week of inflows, adding up to $3.8 million. Similarly, funds based on multiple assets observed inflows of $22.8 million.
The demand for cryptocurrency investment products surged towards the last week, as the report emphasizes.
This resurgence in interest is largely accredited to a change in market anticipations towards a potential reduction of 50 basis points in interest rates on September 18, swayed by remarks from Bill Dudley, a former President of the New York Fed.
In geographical terms, the United States led with inflows of $416 million, with Switzerland coming in second with inflows of $27 million. Noteworthy is the fact that Switzerland is nearing a year-to-date flow of $400 million, ranking it second.
Germany also noted positive inflows, reaching $10.6 million last week, despite its net flows standing at a negative $319 million in 2024 so far.
Canada and Sweden saw modest outflows amounting to $18 million and $4.6 million, respectively.
Blockchain equities benefited from inflows of $105 million, buoyed by the introduction and launch of new ETFs within the US.
Trading volumes for ETFs steadied at $8 billion over the week, showing a substantial decrease from the average $14.2 billion recorded this year to date.
