Digital asset fund flows | September 16th 2024

Flows Rebound with $436m Inflows, Bitcoin Leads, Ethereum Struggles

• Digital asset investment products saw a reversal, with inflows reaching US$436m after a period of outflows amounting to US$1.2bn.

• We believe the surge in inflows towards the end of the week was driven by a significant shift in market expectations for a potential 50 basis point interest rate cut on September 18th.

• Ethereum continued to face challenges, experiencing outflows of US$19m.

Digital asset investment products saw a reversal, with inflows reaching US$436m after a period of outflows amounting to US$1.2bn. We believe the surge in inflows towards the end of the week was driven by a significant shift in market expectations for a potential 50 basis point interest rate cut on September 18th, following comments from former NY FED President Bill Dudley. Trading volumes in ETFs were flat at US$8bn for the week, much lower than the average US$14.2bn this year so far.

Regionally, the US saw inflows totalling US$416m, with notable inflows from Switzerland and Germany at US$27m and US$10.6m respectively. While minor outflows were seen in Canada totalling US$18m.

Bitcoin was the primary focus, seeing US$436m of inflows having seen a 10-day run of outflows totalling US$1.18bn. Short-bitcoin flows reversed, seeing outflows of US$8.5m following 3 straight weeks of inflows.

Ethereum continued to suffer, seeing US$19m in outflows, the only other asset alongside ith short-bitcoin, in what we believe is due to concerns over L1 profitability following Decun. Conversely, Solana saw its 4^th week of inflows totalling US$3.8m.

Blockchain equities saw inflows of US$105m following the seeding and launch of several new ETFs in the US.

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