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FOMC Rate Cuts Fueling $321 Million Surge in Crypto Investments
Sep. 23, 2024. 3 mins. read.
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FOMC rate cuts triggered $321 million in crypto inflows, led by Bitcoin with $284 million, while Ethereum saw outflows for the fifth consecutive week, delaying the anticipated "altcoin season."
Crypto investment products saw inflows of $321 million last week, spurred by the Federal Open Market Committee’s (FOMC) decision to cut interest rates. Bitcoin (BTC) led the surge, while altcoins continued to lag behind.
Bitcoin dominated the inflows, attracting $284 million in investments, while short-Bitcoin products also saw increased demand. In contrast, Ethereum (ETH) struggled, recording its fifth consecutive week of outflows, with $28.5 million exiting the market. The underperformance of Ethereum ETFs, partly driven by ongoing Grayscale outflows, has been a contributing factor. Grayscale’s Ethereum ETF alone has recorded cumulative net outflows of $2.77 billion, according to Sosovalue data.
Meanwhile, Bitcoin ETFs have seen a surge in popularity among institutional investors. As of September 20, these products reported cumulative net inflows of $17.69 billion. Despite this success, Grayscale’s GBTC saw $20.07 billion in outflows, bucking the positive trend for other Bitcoin ETFs. “It’s a big day for bitcoin ETFs, which have set a new high watermark of $17.7 billion year-to-date,” noted ETF analyst Eric Balchunas.
However, despite Bitcoin’s strong performance, the anticipated “altcoin season,” where smaller cryptocurrencies outperform Bitcoin and Ethereum, has not yet materialized. Analysts suggest Bitcoin ETFs are positioning BTC as a separate class of asset, delaying capital rotation into altcoins.
One analyst remarked, “Institutions will not be rotating out of their Bitcoin to play alts.” The latest report from CoinShares highlighted the Fed’s rate cut as a key driver of these inflows, with the US leading the charge, contributing $277 million to the total. Although altcoins are gaining some traction, Bitcoin remains dominant in the market.
Crypto investment products saw inflows of $321 million last week, spurred by the Federal Open Market Committee’s (FOMC) decision to cut interest rates. Bitcoin (BTC) led the surge, while altcoins continued to lag behind.
Bitcoin dominated the inflows, attracting $284 million in investments, while short-Bitcoin products also saw increased demand. In contrast, Ethereum (ETH) struggled, recording its fifth consecutive week of outflows, with $28.5 million exiting the market. The underperformance of Ethereum ETFs, partly driven by ongoing Grayscale outflows, has been a contributing factor. Grayscale’s Ethereum ETF alone has recorded cumulative net outflows of $2.77 billion, according to Sosovalue data.
Meanwhile, Bitcoin ETFs have seen a surge in popularity among institutional investors. As of September 20, these products reported cumulative net inflows of $17.69 billion. Despite this success, Grayscale’s GBTC saw $20.07 billion in outflows, bucking the positive trend for other Bitcoin ETFs. “It’s a big day for bitcoin ETFs, which have set a new high watermark of $17.7 billion year-to-date,” noted ETF analyst Eric Balchunas.
However, despite Bitcoin’s strong performance, the anticipated “altcoin season,” where smaller cryptocurrencies outperform Bitcoin and Ethereum, has not yet materialized. Analysts suggest Bitcoin ETFs are positioning BTC as a separate class of asset, delaying capital rotation into altcoins.
One analyst remarked, “Institutions will not be rotating out of their Bitcoin to play alts.” The latest report from CoinShares highlighted the Fed’s rate cut as a key driver of these inflows, with the US leading the charge, contributing $277 million to the total. Although altcoins are gaining some traction, Bitcoin remains dominant in the market.
Source: FOMC Rate Cut Fuels $321 Million Crypto Investment Surge
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