The 6-week run of net inflows in digital asset investment products has ended as investors took profits last week after the recent crypto rally. Digital asset funds saw $30 million in outflows last week, most of which were focused on Bitcoin, according to CoinShares.
Ethereum Sees Inflows After Successful Upgrade
Digital asset funds recorded $30 million in outflows last week, terminating the prior 6-week inflow streak, according to the latest CoinShares report. The change in sentiment is likely because investors took profits after the price of Bitcoin exceeded the $30,000 mark earlier this month.
The most significant portion of the outflows was in the US and Canada, at $21.9 million and $32 million, respectively. The negative sentiment in North America was offset by optimism in Germany, which registered $29 million in inflows.
According to the report, outflows were almost entirely focused on Bitcoin-related funds, totaling $53 million last week. In the past four weeks, Bitcoin investment products saw four consecutive weeks of net inflows of $310 million.
As opposed to previous weekly reports, Ethereum investment funds saw $17m million in inflows this week as investors gained confidence in the world’s second-biggest cryptocurrency after the successful completion of the Shapella upgrade. Interestingly, the majority of Ethereum inflows came from Europe. Short-bitcoin investment funds also recorded minor inflows last week.
What Fueled Bitcoin’s Recent Rally?
The end of the 6-week run of inflows for Bitcoin funds follows the latest rally in the top cryptocurrency that saw its price break above the $30,000 psychological level for the first time in 10 months. That week, digital asset funds saw inflows of $114 million, of which $104 million was seen in Bitcoin-related products.
The restored positive sentiment around digital assets comes as investors keenly await the end of the interest rate-hiking cycle by the Federal Reserve and other global central banks. The Fed has been raising interest rates nonstop since March 2022, putting severe pressure on cryptocurrencies and other risk assets.
But now, rates are near the expected peak of above 5%, implying one more 0.25 percentage point hike at the Fed meeting next month. Analysts at Standard Chartered believe the end of the tightening cycle could propel Bitcoin’s price to a whopping $100,000 by the end of 2024 as crypto winter likely approaches its end.
This article originally appeared on The Tokenist
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