Cryptocurrency Investment Products See $436 Million Inflows, Ethereum Continues to Fall

According to a recent report from CoinShares, inflows into cryptocurrency investment products rebounded last week, with Bitcoin leading the way with net inflows reaching $436 million.

Cryptocurrency funds from asset managers such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares, and 21Shares saw positive inflows in the week ending September 13, after two consecutive weeks of outflows. CoinShares believes this phenomenon can be explained by market expectations of a rate cut by the U.S. Federal Reserve.

In the latest “Digital Asset Fund Flows Weekly Report,” CoinShares Research Director James Butterfill writes:

“We believe the surge in inflows over the weekend was due to a significant shift in market expectations that a 50 basis point rate cut would occur on September 18.”

But Butterfill added that trading volumes for cryptocurrency investment products were flat this week at $8 billion, well below the 2024 average of $14.2 billion.

Ethereum is a classic while Bitcoin investment products dominate

According to CoinShares, Bitcoin (BTC) investment products led the reversal, with inflows of $436 million and outflows of $1.8 billion for the 10th straight day.

Short-term Bitcoin investment products also reversed course, recording a net outflow of $8.5 million after three consecutive weeks of inflows.

Solana (SOL) investment products also saw net inflows of $3.8 million last week, the fourth week in a row. Litecoin (LTC) and Cardano (ADA) also saw inflows of $300,000 and $600,000, respectively.

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However, Ether (ETH) “continued to struggle,” with $19 million in outflows in the week of September 9-13, on top of $98 million in inflows the week before. CoinShares attributes this to concerns about the profitability of Layer 1 blockchains following the Dencun upgrade.

Some traders say that while spot Bitcoin ETFs have seen significant inflows since their launch on January 11, Ethereum ETFs have experienced net outflows, indicating a shift in investor preference towards Bitcoin.

This caused the ETH/BTC rate to drop below $0.04, its lowest level since April 2021.

Since its launch on July 23, the Ether ETF has seen net outflows of $581 million. In contrast, the spot Bitcoin ETF has brought in over $12 billion in its first two months and has seen net inflows of over $17 billion in its first eight months of trading.

This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.