Cryptocurrency funds experienced significant inflows last week, largely driven by Bitcoin, which attracted an impressive $534 million amidst speculation regarding potential interest rate reductions. This surge in investment occurred closely following remarks made by Federal Reserve Chair Jerome Powell on August 23, indicating that an adjustment in monetary policy may be forthcoming as early as September. Powell’s comments have led to a renewed interest in riskier assets, with Bitcoin exchange-traded funds (ETFs) exhibiting notable growth in demand.

According to a report published on August 26, authored by CoinShares’ Head of Research, James Butterfill, Bitcoin investment products alone garnered substantial inflows totaling $534 million, predominantly stemming from trading activities on the preceding Friday. On that day, Bitcoin ETFs listed on U.S. exchanges marked their seventh consecutive day of positive inflows, amassing $252 million—an increase that reflects the highest level of investment the funds have seen in nearly a month. This remarkable inflow volume resulted in the combined weekly total for these products reaching $506.7 million, a stark rebound from the mere $32.58 million observed the previous week.

Conversely, Ethereum’s performance contrasted sharply with Bitcoin’s, as it suffered outflows amounting to $36 million during the same period. Butterfill noted that while newer Ethereum ETF issuers managed to attract capital, the Grayscale Ethereum Trust experienced significant outflows totaling approximately $118 million. He further elaborated, stating, “A month in from the ETH ETF launches, the newly introduced Ethereum ETFs have seen $3.1 billion in inflows, but this has been partially mitigated by outflows from the Grayscale Trust, which total $2.5 billion.”

In total, all crypto investment products cumulatively resulted in inflows of $533 million, marking the most substantial influx seen in five weeks. The United States emerged as the primary contributor to these inflows, accounting for $498 million, while Hong Kong and Switzerland contributed $16 million and $14 million, respectively. This trend illustrates the shifting dynamics within the cryptocurrency investment landscape, reflecting investor optimism amid the prospect of favorable monetary policy adjustments.

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