Investment products based on cryptocurrencies experienced a significant increase in funds over the past week, marking the second consecutive week of positive inflows following the recent downturn in the market.
According to data from CoinShares, digital asset investment products gathered a total of $932 million between May 13 and 17. This surge in funds was mainly driven by the immediate response to the U.S. Consumer Price Index (CPI) report, which indicated that inflationary pressures were once again moderating. Despite the increase in inflows, the weekly trading volumes remained relatively low at $10.5 billion, a notable contrast to the $40 billion seen in March.
The CPI report released on May 15 revealed that inflation had risen by 0.3% in April, following a 0.4% increase in March. The year-on-year CPI growth of 3.4% was primarily driven by significant increases in the energy and food sectors.
In a previous analysis conducted by CoinShares Research, it was noted that after the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States in January, the factors influencing Bitcoin’s price have realigned with market expectations surrounding interest rates.
Grayscale’s Bitcoin ETF experienced minor inflows during the week, amounting to $18 million. Since its conversion in January, the fund has witnessed outflows totaling $16.6 billion. On a regional level, Hong Kong and Canada saw outflows of $83 million and $17 million, respectively.
CoinShares reported that various altcoin funds, including Solana (SOL), Chainlink (LINK), and Cardano (ADA), saw inflows during the previous week, with net flows of $4.9 million, $3.7 million, and $1.9 million, respectively. However, Ether (ETH) funds experienced outflows of $23 million.
The price of Ether continues to face pressure due to concerns about how the Securities and Exchange Commission (SEC) will decide on spot Ether ETFs. The first deadline for the crypto ETF set by the Commission is scheduled to expire on May 23.
Two ETF analysts, James Seyffart and Eric Balchunas, have revised their prediction regarding the SEC’s approval of spot Ether ETFs. Initially expecting a denial, they now believe there is a 75% chance of approval after learning new information about the SEC’s stance.
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