Capital inflows into digital asset markets following interest rate speculation

Digital asset investment products saw significant inflows of $932 million for the second week in a row, mainly driven by expectations of interest rate cuts. This notable increase in capital inflows was mainly observed during the last three trading days, which accounted for 89% of the total weekly inflows, following a report showing that the Consumer Price Index (CPI) was lower than expected.

Despite this increase, weekly trading volume remained significantly lower at $10.5 billion, compared to $40 billion in March, reflecting a recalibration in Bitcoin prices that is closely linked to interest rate expectations.

Regional dynamics and institutional importance

CoinShares statistics show that the United States emerged as a dominant player, with an impressive inflow of $1.002 billion. In a major turn of events, Grayscale Investments witnessed its first inflows since January, totaling $18 million, a notable shift after seeing $16.6 billion in outflows from the launch of its exchange-traded fund (ETF). . In Europe, Switzerland and Germany also recorded modest inflows of $27 million and $4.2 million respectively. However, the Hong Kong and Canadian markets suffered outflows, losing $83 million and $17 million respectively.

Bitcoin led the charge with a substantial inflow of $942 million, while positions betting on Bitcoin saw negligible activity, indicating bullish investor sentiment. Among the altcoins, Solana, Chainlink and Cardano were prominent beneficiaries, with inflows of $4.9 million, $3.7 million and $1.9 million respectively. Conversely, Ethereum had a challenging week, with outflows of $23 million, amid ongoing concerns over the potential approval of a spot-based ETF by the Securities and Exchange Commission (SEC).

The broader blockchain sector continued to face challenges, with equity funds related to blockchain technology experiencing outflows for the 14th week of 20 this year, reaching $512 million in outflows to date. This trend underlines investors’ cautious approach amid regulatory uncertainties and market volatility.