Crypto investment products saw their largest inflows in five weeks, with $533 million flowing into the sector, according to CoinShares’ latest weekly money flow report.
James Butterville, head of research at CoinShares, explained that these flows came after US Federal Reserve Chairman Jerome Powell’s remarks during the Jackson Hole symposium last week.
At the event, Powell indicated that the market may expect interest rate cuts in September, which many observers saw as a positive driver for Bitcoin and other cryptocurrencies.
These statements also appear to have boosted trading volumes, with trading volumes last week reaching $9 billion, which is much higher than previous weeks.
Bitcoin and the US lead the flows
Bitcoin dominated the flows, recording $543 million, most of which happened on Friday after Powell’s lax comments. Butterfell stated that this shows Bitcoin’s sensitivity to interest rate expectations.
Interestingly, the positive sentiment also attracted short short positions, with $1.7 million flowing into Short BTC products.
By contrast, Ethereum saw outflows of $36 million last week. This may be due to investors continuing to exit the Grayscale Ethereum Fund. Butterville wrote:
“Although new entities are still seeing inflows, the Grayscale Ethereum Fund offsets this with $118 million in outflows.”
Despite this, the newly launched Ethereum ETFs in the U.S. raised inflows of $3.1 billion, partially offsetting the $2.5 billion outflow from the Grayscale Fund.
Meanwhile, blockchain shares recorded inflows for the third consecutive week, totaling $4.8 million. Other digital assets such as Solana, XRP and Litecoin also saw joint inflows of around $1 million.
At the regional level, the United States was unsurprisingly dominant for the bulk of total flows, recording $498 million. Hong Kong and Switzerland also saw significant inflows, reaching $16 million and $14 million, respectively.
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On the contrary, Germany saw minor outflows totaling $9 million, making it one of the few countries to record net outflows since the beginning of the year.
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