As an experienced analyst, I believe this surge in inflows into Bitcoin and Ethereum investment products is a clear indication of growing investor confidence in digital assets. The macroeconomic environment, marked by weaker-than-expected data in the US and anticipations of earlier monetary policy rate cuts, has fueled this momentum.
Last week, the investment scene for digital assets experienced a substantial surge, with a total of $2 billion flowing into various products. Among these, Bitcoin (BTC) was the clear leader, attracting an impressive $1.97 billion. Ethereum (ETH), too, made headlines due to its notable influx of funds.
Bitcoin & Ethereum Inflows Surge
The trend of crypto funds receiving substantial investments has persisted for five consecutive weeks, accumulating a total of $4.3 billion. The trading activity in crypto Exchange-Traded Products (ETPs) reached an impressive $12.8 billion mark last week. It represents a significant 55% jump from the previous week’s figures. Notably, investments were observed across most providers, while outflows from ETPs continued to decrease gradually.
The unexpectedly weak US economic data has caused a change in investor sentiment, leading them to anticipate sooner monetary policy rate reductions. As a result, favorable market movements pushed the total assets under management (AuM) above $100 billion for the first time since March.
In the regional context, the United States led the way in terms of investment inflows, adding a total of $1.98 billion. Notably, this period saw the third largest single-day inflow on record at the beginning of the week. The iShares Bitcoin ETF (IBIT) managed by BlackRock has recently surpassed the Grayscale Bitcoin Trust in terms of assets under management, now standing at approximately $21 billion.
Additionally, Bitcoin attracted approximately $1.97 billion in investments during the past week. Conversely, short positions on Bitcoin saw withdrawals amounting to $5.3 million for the third week in a row. This trend signifies a growing optimistic stance among traders towards Bitcoin.
Ethereum attracted notable interest lately, with a record $69 million inflow during the past week. This surge might be due to the SEC’s unexpected approval of 19-b4s for Spot Ethereum ETFs. Furthermore, investors’ enthusiastic response highlights Ethereum’s increasing allure and the broader recognition of its potential.
According to CoinShares data, there was limited action among altcoins. Notably, Fantom (FTM) and XRP displayed noticeable activity, with Fantom attracting investments of $1.4 million and XRP following closely with $1.2 million. The speculation surrounding a potential XRP Exchange-Traded Fund (ETF) approval in the US has likely fueled this inflow surge for XRP.
CPI & PPI Data This Week
Cryptocurrency fans are keeping a keen eye on important inflation figures this week, specifically the U.S. Consumer Price Index (CPI) for May, which is scheduled to be released on June 12th. The CPI and its counterpart, the Core CPI, play crucial roles in indicating price fluctuations and offer valuable insights into the current state of inflation within the United States.
Furthermore, the U.S. Producer Price Index (PPI) and its core counterpart serve as important indicators of inflation patterns within the nation. The upcoming publication of these data for May, scheduled for Thursday, June 13, will offer valuable new information.
As a researcher, I can’t stress enough the significance of the forthcoming inflation metrics in guiding the Federal Reserve’s future monetary policy decisions. Given the ambiguous U.S. employment figures from last week, the upcoming Consumer Price Index (CPI) and Producer Price Index (PPI) reports are indispensable pieces of information for Bitcoin and altcoin investors, as they will provide insights into the Fed’s potential next steps.
The European Central Bank lowered its interest rates by 0.25% recently, fueling hope among investors for a potential Federal Reserve interest rate reduction. This optimism boosted Bitcoin’s price. However, most market analysts believe the Federal Reserve will not reduce rates at this time. Yet, the upcoming Fed press conference might reveal significant actions to curb inflation.
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2024-06-10 12:11