Cryptocurrency funds have seen inflows of $1.07 billion after renewed expectations of an interest rate cut by the Federal Reserve in December.
Bitcoin, Ethereum, and XRP lead institutional demand as investors return to digital assets.
Hopes for quantitative easing boost sentiment after four weeks of large outflows and a weak market.
Digital asset investment inflows reached $1.07 billion after four weeks of withdrawals, reviving hopes for a rate cut from the U.S. Federal Reserve and boosting investor confidence.
Market sentiment shifted after comments from Federal Open Market Committee member John Williams, who indicated that monetary policy remains constrained. This fueled expectations of a potential rate cut in December and stimulated new investment.
Hopes for a rate cut spur inflows of over $1 billion into cryptocurrencies.
The reversal of $1.07 billion follows exchange-traded products (ETPs) for digital assets experiencing outflows of $5.7 billion over the previous four weeks. Last week, digital currency inflows reached $1.94 billion.
CoinShares' latest weekly report attributes last week's inflows to comments from John Williams regarding U.S. monetary policy, leading to speculation about potential easing.
Trading volumes dropped to $24 billion during Thanksgiving week, compared to $56 billion the previous week. Even with slow trading, investors have been moving capital back into crypto products at a pace not seen since early November.
Weekly ETP inflows for digital assets show a reversal of inflows amounting to $1.07 billion. Source: CoinShares
Interest rates significantly impact digital markets. Lower rates reduce the opportunity cost of holding unprofitable assets like Bitcoin.
This shift makes risk assets more attractive to institutional investors seeking higher returns. Traditionally, easier monetary conditions have been associated with rallies in digital assets.
The U.S. accounted for 93% of total inflows into digital currencies, while Canada saw $97.6 million in outflows and Switzerland $24.6 million, reflecting strong demand in regions supporting traditional cryptocurrencies.
In contrast, Germany saw outflows of $55.5 million, indicating a divergence in investor confidence and potential portfolio adjustments at year-end.
Bitcoin, Ethereum, and XRP attract most inflows.
Bitcoin raised $464 million, confirming its position as the largest institutional holding. Ethereum followed with $309 million, driven by expectations around network upgrades and increased deposits.
Notably, "XRP" was reported by CoinShares to be the standout with record inflows of $289 million.
Digital asset inflows led by "XRP" recorded $289 million. Source: CoinShares
The "Short-Bitcoin ETPs" experienced outflows of $1.9 million, indicating that traders are moving away from bearish bets. This ongoing shift aligns with widespread optimism and reduced hedging among participants.
Cardano saw outflows of $19.3 million, resulting in a 23% reduction of its managed assets. This indicates selective institutional interest, with capital flowing towards prominent leaders and emerging narratives rather than being evenly distributed among all altcoins.
On-chain data highlights notable supply movements supporting bullish sentiment. A market observer on X noted that large amounts of "XRP" were withdrawn from centralized exchanges with the launch of new ETFs.
This pattern suggests that investors are moving assets into long-term storage, reducing the supply available for immediate sale. With new institutional demand via ETPs coinciding with dwindling supply, the result could be price squeezes and upward momentum.
The convergence of positive macroeconomic signals, regulatory developments, and new investment vehicles has opened the door for continued inflows.
In December and beyond, the interaction between Federal Reserve policy, institutional demand, and cryptocurrency markets will determine whether this reversal leads to a sustainable rise or merely a temporary pause in recent weakness.
#ETPs #BinanceSquareBTC #BinanceSquareFamily #BinanceSquare #NewsAboutCrypto
