In the past week, Ethereum has gained a massive amount of inflows in crypto investments worth $2 billion.
The crypto asset investment products experienced inflows totaling $2 billion during the first week of June, bringing the total for the five weeks to over $4.3 billion. In addition, the trading volumes of all crypto ETPs amounted to an astounding $12.8 billion last week, a significant increase of 55% from the previous week.
CoinShares has observed a significant decrease in outflows from incumbent providers, in addition to inflows across nearly all providers. The United States’ macroeconomic data has been less robust than anticipated, resulting in this sentiment change. Moreover, this week, the Federal Reserve’s rate cut decision will be the primary focus of attention, as the United States will disclose its May CPI and PPI numbers.
CoinShares observed that this favorable price action has resulted in the total assets under management (AuM) surpassing $100 billion for the first time since March of this year.
Bitcoin (BTC) remains the primary focus, with inflows totaling $1.97 billion for the week. Conversely, short-Bitcoin experienced outflows for the third week, totaling $5.3 million. The most significant week of inflows for Ethereum (ETH) since March occurred, with $69 million. This increase is likely a response to the SEC’s unanticipated decision to permit spot-based exchange-traded funds (ETFs).
Ahead of the release of critical macroeconomic data, Bitcoin and Ethereum remain stable
The prices of Bitcoin and Ethereum did not experience any significant fluctuations over the past weekend, as open interest and trading volumes decreased in the wake of a $400 million leverage flush out on Friday. Nevertheless, there is a substantial likelihood that the crypto market will experience a return to volatility in the wake of the CPI release on Wednesday.
The market experienced a significant decline on Friday following the publication of non-farm payrolls (NFP) data, exacerbated by a record build-up of leverage in Bitcoin futures. Bulls were particularly affected by this development. The US economy added 275,000 positions, surpassing the anticipated 185,000, as indicated by the NFP figures. Bitcoin experienced a steep decline, plummeting from $71,000 to $69,000. The employment data has diminished the likelihood of the Federal Reserve implementing any imminent rate cuts.
Nevertheless, QCP Capital thinks the Federal Reserve will not maintain higher interest rates for an extended period. “We concur that this presents an advantageous opportunity to acquire the dip, as the markets will progressively anticipate at least one Fed rate cut in the future.” QCP Capital stated that the United States will find it challenging to disregard the fact that the rest of the world is continuing to reduce rates.
The monetary easing cycle was initiated last week with the announcement of rate reduction by the European Central Bank and the Bank of Canada.