CoinShares: Digital Asset Funds See $2 Billion Inflows Amid Anticipation of Rate Cuts

On Jun 10, 2024

Significant Inflows in Digital Asset Funds

Digital asset investment products experienced substantial inflows totaling $2 billion in the first week of June, according to CoinShares. This marks a notable surge in investor interest, likely fueled by expectations of upcoming rate cuts.

Over a span of five weeks, inflows have now reached $4.3 billion. Trading volumes in exchange-traded products (ETPs) also saw a significant rise, hitting $12.8 billion for the week—an increase of 55% from the previous week.

Bitcoin and Ethereum Lead the Way

Bitcoin (BTC) remained the primary focus for investors, attracting $1.97 billion in inflows during the week. Ethereum (ETH) also witnessed considerable interest, seeing its best week since March with inflows totaling $69 million. This surge is attributed to the SEC’s unexpected decision to permit spot-based ETFs.

Regional Insights and Market Sentiment

In the United States, inflows were particularly strong, amounting to $1.98 billion. The first day of the week saw the third-largest daily inflow on record, with the iShares Bitcoin ETF now surpassing Grayscale with $21 billion in assets under management (AuM).

Market sentiment appears to have shifted in response to weaker-than-expected macroeconomic data from the US, bringing forward expectations for monetary policy rate cuts. This positive sentiment has driven total AuM above the $100 billion mark for the first time since March.

Altcoins and Other Investment Products

While Bitcoin and Ethereum dominated the inflows, some altcoins also saw minor activity. Notably, Fantom (FTM) and XRP recorded inflows of $1.4 million and $1.2 million, respectively.

For the third consecutive week, short-bitcoin products experienced outflows, totaling $5.3 million. This trend indicates a waning interest in bearish bets on Bitcoin.

Unusually, inflows were observed across almost all providers, with a continued slowdown in outflows from incumbents. This widespread interest underscores a broader positive market sentiment.

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