Crypto Investment Products Experience Highest Inflows in Five Weeks

August 27, 2024 02:56 PM AEST | By Team Kalkine Media

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Crypto Investment Products Experience Highest Inflows in Five Weeks — Image source: shutterstock

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Bitcoin experienced an 8% increase in value amidst a significant rise in inflows to Bitcoin-related exchange-traded products (ETPs). According to a report by CoinShares released on August 26, digital asset investment products saw substantial weekly inflows totaling $533 million from August 18 to August 24. This uptick in purchasing activity marked the largest inflows in the past five weeks, driven by speculation surrounding interest rate cuts by the Federal Reserve.

During this period, Bitcoin-related ETPs received the highest inflows, amounting to $543 million. Notably, BlackRock's iShares Bitcoin Trust (IBIT) led this influx, with $318 million in new investments. In contrast, Ether-related investment products faced outflows of $36 million. Despite new {Ethereum} (ETH) attracting inflows, the Grayscale Ethereum Trust (ETHE) recorded significant outflows of $118 million, contributing to the overall negative flow for Ethereum.

Despite these outflows, Ethereum ETFs, which launched on July 23, have attracted $3.1 billion in inflows. However, these gains were partially offset by outflows from the Grayscale Ethereum Trust, which experienced $2.5 billion in withdrawals during the same period.

The recent surge in Bitcoin's price, rising from $59,500 on August 18 to $64,300 on August 24, reflects the impact of these inflows. Although Bitcoin's value has increased, it remains approximately 6% lower compared to its peak of $69,900 on July 29, according to CoinGecko.

While the recent inflows surpassing $500 million are noteworthy, they fall short of the largest inflow recorded in 2024, which occurred from March 11 to March 17, shortly after Bitcoin reached its historical high of $73,600 on March 14.

Matrix Port, a crypto financial services platform, suggests that the recent rise in Bitcoin is largely driven by the active minting of new stablecoins, such as Tether (USDT). This trend indicates that institutional activity may be exerting a more significant influence on Bitcoin’s price movements than broader macroeconomic factors.

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