Crypto Investment Products See Significant Inflows Despite Market Slump
Summary:
After a recent market slump, cryptocurrency-based investment portfolios have seen two consecutive weeks of significant inflows, with an increase of $932 million reported between May 13 and 17. This seems to be a reaction to the U.S. CPI report, which indicated a possible inflation slowdown. CoinShares data reveals altcoin funds, such as Solana (SOL), Chainlink (LINK), and Cardano (ADA), experienced inflows, while Ether (ETH) saw outflows due to uncertainties over the SEC's pending decision on spot Ether ETFs. Analysts now predict a 75% approval chance for spot Ether ETFs from the SEC, revised from an earlier expectancy of denial.
In the second week in a row, cryptocurrency-backed investment portfolios witnessed a noteworthy intake, bouncing back from the recent market slump. As per the data provided by CoinShares, there was a surge of $932 million in such investments across May 13 and 17. This surge was reflected in the immediate aftermath of the U.S. Consumer Price Index (CPI) report, indicating a possible slowdown in inflation. Despite these higher intakes, the weekly volumes at $10.5 billion were comparatively minimal, starkly different from the $40 billion witnessed in March. Notably, the significant increase in flows was a direct reaction to the unexpectedly low CPI report on Wednesday. The last three business days of the week accounted for 89% of total flows, providing support to the idea that Bitcoin prices have once again synced with interest rate future prospects. The report for May 15 highlighted a rise in inflation by 0.3% in April, as a sequel to 0.4% increase in March. With crucial rises in the energy and food sectors, the annual CPI saw an increase of 3.4%. As observed by CoinShares Research, Bitcoin’s price dynamics adjusted to market forecasts about interest rates after spot Bitcoin ETFs got approval in the U.S. in January. Grayscale’s Bitcoin ETF witnessed minor inflows for the week, amounting to $18 million. Post its conversion in January, the fund experienced outflows worth $16.6 billion. In a regional perspective, Hong Kong and Canada saw outflows of $83 million and $17 million respectively. Different altcoin funds also noted inflows in the past week, as per CoinShares. This included Solana (SOL), Chainlink (LINK), and Cardano (ADA), who saw net flows of $4.9 million, $3.7 million, and $1.9 million respectively. On the contrary, funds for Ether (ETH) saw an outflow of $23 million. Pressures on Ether prices continue to mount amid uncertainties regarding the decision-making of the Securities and Exchange Commission (SEC) on spot Ether ETFs. May 23 is the first deadline for the crypto ETF by the Commission. With fresh insights about the SEC's views, two ETF analysts, James Seyffart and Eric Balchunas, have updated their prediction for approval chances of spot Ether ETFs from denial to 75%. Magazine: The significant risks in Ethena's stablecoin model (aren't what you might think)
Published At
5/21/2024 12:09:26 AM
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