Bitcoin Dominates Crypto Inflows, Investors Eyes to Federal Reserve Rate Cuts

On Sep 17, 2024

Bitcoin saw a significant recovery, attracting $436 million in inflows as market optimism grows over potential U.S. Federal Reserve interest rate cuts.
Ethereum faces $19 million outflows due to concerns over profitability in its Layer 1 operations, while Solana continues to attract positive inflows.

Digital asset investment products have rebounded dramatically, with CoinShares reporting inflows of $436 million in the last week alone. Notably, Bitcoin led the charge, accounting for all of the inflows, indicating a considerable comeback following a prolonged period of $1.2 billion in outflows.

In contrast, Ethereum experienced $19 million in outflows as a result of concerns about its profitability in Layer 1 operations, particularly in light of the recent Dencun upgrade. Solana, like other assets, witnessed favorable movement, attracting $3.8 million in inflows during the same period.

Rising Market Confidence Driven by Anticipated Federal Reserve Rate Cuts

The comeback in digital asset investments is largely due to rising market confidence, which is fueled by expectations that the United States Federal Reserve would cut interest rates by 50 basis points on September 18, 2024.

This decision is viewed as a possible catalyst for increasing market liquidity, encouraging investors to devote more capital to riskier asset classes such as cryptocurrency.

Regionally, the United States led with $416 million in inflows, while blockchain equities followed closely, earning a significant $105 million, possibly bolstered by the debut of multiple new ETFs in the American market.

This increasing interest in blockchain investments demonstrates the market’s rising confidence in digital assets, notwithstanding turbulent conditions.

Meanwhile, as we previously noted, market analysts are skeptical about Bitcoin’s future. Renowned Bitcoin critic Peter Schiff, known for his pessimistic attitude on the cryptocurrency, has maintained his prediction that Bitcoin’s price will soon fall dramatically, likely to between $15,000 and $20,000.

He mentioned the likelihood of a “triple top” technical pattern forming, which might indicate a major drop in the BTC price.

In contrast, famous crypto influencer Crypto Rover is more positive, predicting a bullish breakout in Q4 of this year. Rover’s analysis is based on previous pricing trends, which have frequently seen Bitcoin’s value increase throughout the fourth quarter.

Bitcoin is currently trading at $58,789.19, down 0.21% over the last 24 hours. This minor drop, while not very concerning, underscores the continuous volatility that has defined the bitcoin market in recent months. However, many investors are cautiously hopeful about Bitcoin’s future, particularly given the potential macroeconomic developments on the horizon.

Beside that, the second assassination attempt on former US President Donald Trump is one of the most startling incidents that has led to Bitcoin’s recent price changes.

According to a CNF report, the effort, which occurred on September 15 while Trump was playing golf at his West Palm Beach estate, sent shockwaves through the global markets, including the crypto market, leading the BTC price down.