Investment Rebounds Amid Interest Rate Cut Optimism
Cryptocurrency investment products have snapped a four-week losing streak, drawing approximately $1 billion in fresh capital. This marks a significant turnaround after four consecutive weeks of outflows totaling $5.5 billion.
Crypto exchange-traded products (ETPs) recorded $1.07 billion in inflows last week, representing the first week of gains since late October, according to data from the European crypto asset manager CoinShares.
James Butterfill, CoinShares’ head of research, attributed this rebound in sentiment to optimism surrounding a potential U.S. interest rate cut. This optimism was fueled by recent remarks from Federal Open Market Committee (FOMC) member John Williams, who indicated that monetary policy remains restrictive.
"The turnaround in sentiment follows FOMC member John Williams comments stating monetary policy remains restrictive, raising hopes for an interest rate cut this month," Butterfill noted.
XRP Leads Record Inflows Amid Broader Market Movements
Bitcoin (BTC), Ether (ETH), and XRP (XRP) emerged as the top performers in ETP inflows last week. Bitcoin led the gains with $464 million, followed by Ether with $309 million and XRP with $289 million.
Despite these weekly inflows, both Bitcoin and Ether are still showing negative territory for the month, with outflows of $2.8 billion and $1.4 billion, respectively.
In contrast, XRP funds have experienced a surge, recording nearly $790 million in month-to-date inflows. This includes the largest weekly inflows on record for the asset, according to CoinShares.
Butterfill linked XRP's significant increase to recent U.S. exchange-traded fund (ETF) launches, such as Canary Capital’s XRP ETF, which debuted in mid-November.
Regional and Issuer Performance Highlights
Regionally, the United States was the primary driver of inflows, contributing almost $1 billion, despite subdued trading activity during the Thanksgiving week, as reported by Butterfill.
Among issuers, Fidelity recorded the largest inflows with $230 million. Volatility Shares Trust followed with $160 million, and BlackRock’s iShares secured $120 million in inflows.
Market Context and Broader Trends
The resurgence in crypto ETPs occurred concurrently with short-term gains across broader cryptocurrency markets last week. Bitcoin, for instance, briefly surpassed the $90,000 mark.
However, this rally proved to be short-lived, as BTC experienced a decline below $86,000 on Monday, according to CoinGecko data.