$2 billion worth of crypto funds are flowing into the market amid buzz about interest rate cuts

Published on:

The cryptocurrency market is buzzing with recent optimism as mutual funds record a historic surge in inflows. CoinShares, a leading digital asset manager, recorded record results $2 billion inflow into cryptocurrency funds in just one week, surpassing the entire net inflow in May.

This positive trend, now in its fifth consecutive week, has seen total assets under management (AUM) in cryptocurrency funds return above the desired $100 billion mark, a level last seen in March 2024.

Bitcoin ETFs are fueling the fire

Bitcoin, the undisputed king of cryptocurrencies, remains the main interest of investors. The recent launch and continued inflow into US-approved Bitcoin cash ETF funds is a major factor influencing current market sentiment.

Source: CoinShares

These exchange-traded funds, which allow investors to hold Bitcoin without directly owning the digital asset, saw $890 million inflows on June 4 alone, marking the third-largest day of inflows on record.

This enthusiasm for Bitcoin ETFs suggests a growing appetite for regulated and accessible ways to participate in the cryptocurrency market, potentially attracting a wider range of investors.

Ethereum shines brilliant, Altcoins promise

While Bitcoin takes center stage, Ethereum, the second largest cryptocurrency is also enjoying a good run. Ethereum funds earned almost $70 million last week, marking the best week since March 2024.

Source: CoinShares

CoinShares attributes this positive inflow to investor expectations surrounding the upcoming launch of spot Ethereum ETFs in the US. The approval of these ETFs could further legitimize the Ethereum ecosystem and unlock significant benefits investment potential.

In addition to the top two coins, altcoins such as Fantom and XRP are also experiencing renewed investor interest, with inflows of $1.4 million and $1.2 million, respectively. This broader market share suggests a potential return of investor confidence across the cryptocurrency landscape.

CoinShares said it has observed that inflows have been extremely widespread across almost all providers, coupled with continued clamping down on outflows from incumbents.

They attribute this change in sentiment to weaker-than-expected US macroeconomic data, which increased expectations of an imminent interest rate cut.

The total market capitalization of cryptocurrencies on the daily chart is $2.4 trillion: TradingView.com

Cryptocurrency price stagnation, economic uncertainty

Despite the surge in fund inflows, cryptocurrency prices did not show a corresponding significant upward movement. This disconnect can be attributed to several factors, including continued investor uncertainty about the future of U.S. economic policy.

The current trend of record inflows into cryptocurrency funds paints a positive picture for the future of the market. The growing popularity of regulated investment vehicles such as spot Bitcoin ETFs means growing institutional acceptance and potentially wider adoption by investors.

Featured image from Vecteezy, chart from TradingView


Leave a Reply

Please enter your comment!
Please enter your name here