As a seasoned researcher with a keen interest in the dynamic world of cryptocurrencies, I find the recent inflows into crypto investment products quite intriguing. The $1.2 billion influx seems to be a clear indication of investors’ appetite for riskier assets amidst the Fed’s interest rate cut and the SEC’s approval of BlackRock’s Bitcoin ETF.
Over the last week, investments in cryptocurrency surged beyond $1.2 billion, as more and more investors are opting for riskier financial options following the Federal Reserve’s latest 0.5% reduction in interest rates.
Based on CoinShares’ recent analysis, the inflow of $1.2 billion might be a result of ongoing anticipation for easy monetary policy in the U.S., as optimism is heightened by the U.S. Securities and Exchange Commission granting permission for options on BlackRock’s Bitcoin spot exchange-traded fund (ETF).
In this updated account, we find that Bitcoin-oriented investment vehicles experienced a total of $1.07 billion in investments, while Ethereum-focused products recorded inflows for the first time in five weeks following previous outflows, amounting to approximately $86.9 million. This figure surpasses the $65 million in inflows to multi-asset investment products.
Inflows totaling $8.8 million were recorded for investment products that focus on shorting Bitcoin, while those centered around Litecoin saw an inflow of $2 million – this surpasses the $800,000 inflow for XRP-focused products. Meanwhile, Cardano investment products experienced only a modest inflow of $100,000.
During this period, investments linked to Solana experienced a withdrawal of approximately $4.8 million, while those tied to Binance‘s BNB saw around $1.2 million in withdrawals. However, collectively, the total assets managed by these investment products increased by 6.2% over the last week.
Currently, inflows occur as the amount of Bitcoin stored on cryptocurrency exchanges has recently plummeted to a five-year low. This decline began earlier this year, and now there are approximately 2.6 million Bitcoins on these platforms, compared to around 3.3 million two years ago.
Based on information from the cryptocurrency analysis company CryptoQuant, it appears that they examine the quantity of Bitcoin stored in wallets linked to digital currency exchanges directly on the blockchain. These exchange wallets gather funds from the platform’s users, and thus represent the amount of Bitcoin that can be quickly sold in the market.
Of particular interest is that Bitcoin miners have drastically lowered their holdings of BTC, reducing them to a level not seen since January 2021. This was during the time when the cryptocurrency’s value skyrocketed from approximately $25,000 to over $69,000 before experiencing a downturn.
Due to the recent halving update in April, the quantity of Bitcoins that miners possess has dropped to its lowest level in three years. This decrease is because the update reduced the reward given to miners for every new block they discover by half.
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2024-10-01 02:09