Key Takeaways
- Digital asset investment products saw $321 million inflows following Fed’s dovish stance.
- Ethereum experienced its fifth consecutive week of outflows, totaling $29 million.
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Crypto products saw $321 million in inflows last week, except Ethereum (ETH) funds, which registered $28.5 million in negative net flows.
As reported by CoinShares, this disconnect between Ethereum funds and the rest of the market is caused by Grayscale’s spot Ethereum exchange-traded fund (ETF), ETHE, which keeps registering outflows coupled with a slow pace by ETH ETFs.
Consequently, last week marked the fifth straight week of outflows for ETH funds.
Meanwhile, Bitcoin (BTC) dominated inflows with $284 million, accompanied by $5.1 million into short Bitcoin products. Moreover, Solana products maintained a consistent pattern of small inflows, attracting $3.2 million last week.
The report highlighted that the money flow into crypto funds is likely driven by the 50 basis point interest rate cut by the Federal Open Market Committee (FOMC) last week.
As a result, these products’ total assets under management (AUM) grew by 9%, while volumes reached $9.5 billion, also up 9% from the previous week.
Regionally, the US led with $277 million in inflows, followed by Switzerland with $63 million. Germany, Sweden, and Canada saw outflows of $9.5 million, $7.8 million, and $2.3 million respectively.
Bitcoin ETFs reversing outflows
US-traded spot Bitcoin ETFs registered nearly $1 billion in outflows between Aug. 26 and Sept. 6 during one of BTC’s recent sell-off.
Yet, most of the losses were recovered in the following two weeks, as these funds amassed $801 million in inflows between Sept. 9 and Sept. 20, according to Farside Investors’ data.
For the second consecutive week, Fidelity’s FBTC dominated the inflows, with nearly $138 million of capital flowing to the US-traded BTC ETF. It was closely followed by ARK 21Shares’ ARKB, which captured roughly $102 million in inflows.
Furthermore, Grayscale’s GBTC outflows moved at a slow pace, amounting to $28.9 million of fleeing cash from Bitcoin ETFs last week.
Notably, US-traded spot Bitcoin ETF flows registered an interesting movement related to the Fed rate cut last week. The day with the largest amount of inflows was Sept. 17, one day before the FOMC meeting, with $186.8 million in cash directed at Bitcoin ETFs.
However, after the 50 basis point cut was announced, these funds witnessed $52.7 million of negative flows. That was the only day closing with outflows last week.
Ethereum ETFs are still lagging
On a shift of tone, US-traded Ethereum ETFs saw $26.2 million in outflows last week. This movement is a combination of a lack of activity by these funds and Grayscale’s ETHE steady and gradual outflow streak.
Five of nine Ethereum ETFs were dormant between Sept. 16 and Sept. 20, when ETHE’s outflows amounted to $46.4 million.
BlackRock’s ETHA registered the largest inflow numbers, with $14.3 million in cash flowing to the fund.
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