FED’s Rate Cut Fuels Surge in Digital Asset Funds: Massive Inflows Seen

Digital asset investment products have witnessed a second consecutive week of significant inflows, reaching a total of $321 million. The continued rise in inflows is largely attributed to the Federal Open Market Committee’s (FOMC) decision last week, which surprised the market with a dovish stance, cutting interest rates by 50 basis points. Following the rate cut, the total assets under management (AuM) in digital asset funds grew by 9%, marking a substantial increase.

Bitcoin Leads the Inflows

Bitcoin (BTC) took the lead, with inflows of $284 million into digital asset funds. The post-rate cut price movement in Bitcoin saw investors largely focusing on the potential for gains, with only $5.1 million flowing into short Bitcoin products. This shift indicates that investors are betting on Bitcoin’s upward trajectory rather than its decline.

Meanwhile, Ethereum (ETH) took a different path. Ethereum investment products faced their fifth consecutive week of outflows, totaling $29 million last week. This trend is mainly due to continued outflows from Grayscale Trust and a lack of strong interest in newly launched exchange-traded funds (ETFs).

Popular altcoin Solana (SOL), on the other hand, continued to see small but consistent weekly inflows. Last week, Solana investment products attracted $3.2 million, highlighting ongoing interest in alternative crypto projects.

Regional Distribution of Inflows: The U.S. Takes the Lead

Regionally, the highest inflows were recorded in the United States, with a total of $277 million. Switzerland followed, posting its second-largest weekly inflow of the year at $63 million. In contrast, there were outflows in Germany ($9.5 million), Sweden ($7.8 million), and Canada ($2.3 million).

The rising interest in digital asset investment products seems to be driven by the Fed’s rate cut decisions, as investors closely monitor central bank policies while seeking new opportunities in the market.

For more updates on the crypto market, stay tuned to Deythere.

Bitcoin, Ethereum, Solana, Federal Reserve, digital asset funds