Cryptocurrency investment products saw inflows above $1.2 billion over the past week as investors increasingly turn to riskier assets after the Federal Reserve’s recent 50 basis point interest rate cut.
According to CoinShares’ latest Digital Asset Fund Flows report, the $1.2 billion flows could be a “reaction to continued expectations of dovish monetary policy in the US,” with sentiment being boosted by the U.S. Securities and Exchange Commission’s approval of options for BlackRock’s spot Bitcoin exchange-traded fund (ETF).
The report details that Bitcoin-focused investment products saw $1.07 billion in inflows, while Ethereum-focused products saw inflows for the first time after five weeks of outflows, bringing in $86.9 million, above the $65 million of inflows to multi-asset products.
Products shorting the flagship cryptocurrency Bitcoin saw $8.8 million of inflows, while Litecoin-focused products saw $2 million of inflows, above the $800,000 XRP-focused products saw. Cardano investment products saw just $100,000 of inflows.
Meanwhile, products offering exposure to Solana saw $4.8 million of outflows, while those offering exposure to Binance’s BNB saw $1.2 million of outflows. In total, assets under management for these products rose 6.2% over the past week.
These inflows come at a time in which the number of Bitcoin being held on cryptocurrency exchanges has recently dropped to a new five-year low after beginning a significant decline earlier this year, to the point that there are now around 2.6 million BTC on these platforms, down from around 3.3 million two years ago.
That’s according to data from cryptocurrency analytics firm CryptoQuant, which analyzes the amount of BTC being held on wallets associated with cryptocurrency exchanges on-chain. These exchange wallets pool the funds of the platform’s users, and reflect the amount of Bitcoin available for sale on the market.
Notably, Bitcoin miners have significantly reduced their BTC reserves, to the point they’re now at their lowest level since January 2021, when the cryptocurrency’s price exploded from around $25,000 to over $69,000 before entering a downturn.
The total amount of Bitcoin held by miners has plummeted to a three-year low as a direct consequence of the recent halving upgrade in April, which halved the coinbase reward miners receive per new block found.
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