The latest flows report from Coinshares, led by its top market analyst James Butterfill, uncovers a strong recovery in digital asset investments, hitting a total of $436 million. The report emphasizes bitcoin as the frontrunner, while ethereum is still facing challenges with continued outflows.

While Bitcoin Bounces Back, Ethereum Deals With Outflows

Coinshares’ analysis highlights a sharp shift in the market, with inflows of $436 million reversing an earlier outflow of $1.2 billion. Butterfill points to this uptick, driven mainly by a change in market sentiment due to expectations of a 50 basis point rate cut. The spark for this shift came from comments made by former New York Federal Reserve President Bill Dudley.

Despite the positive movement, exchange-traded funds (ETFs) trading volumes stayed flat at $8 billion, a notable drop from the average $14.2 billion seen earlier in the year. On the regional front, the U.S. took the lion’s share of inflows with $416 million, followed by Switzerland and Germany, which contributed $27 million and $10.6 million, respectively. However, Canada saw minor outflows of $18 million.

Butterfill’s report explained that bitcoin was the biggest winner here, bouncing back after a 10-day streak of outflows that totaled $1.18 billion. Short-bitcoin positions also saw outflows of $8.5 million after three straight weeks of inflows, signaling that sentiment towards bitcoin is improving. While bitcoin enjoyed a strong recovery, ethereum didn’t share the same fortune.

Butterfill’s findings noted $19 million in outflows for ethereum, making it the only asset—besides short-bitcoin—facing losses in the current market. The report attributed ethereum’s struggle to concerns over the profitability of layer one (L1) protocols, fueled by discussions at the Decentralized Finance Unconference (Decun).

Meanwhile, solana found itself in a more favorable position, with four consecutive weeks of inflows totaling $3.8 million. Blockchain equities also performed well, with $105 million in inflows following the launch of new ETFs in the U.S. The latest trends in digital asset flows signal shifting investor sentiment, suggesting growing optimism around bitcoin and caution towards ethereum.

Source : Bitcoin News - Sep 16, 2024