Digital Asset Funds Surge with $1.9 Billion Inflows Amid Fed Rate Cut

In a significant development for the digital asset market, investment products saw robust inflows amounting to $1.9 billion last week. This surge follows a pivotal interest rate cut by the US Federal Reserve, described as a “hawkish cut,” according to CoinShares.

Market Response to Federal Reserve’s Decision

The Federal Reserve’s decision initially met with cautious investor sentiment. However, as the week progressed and markets absorbed the implications for digital assets, inflows gained momentum. Notably, $746 million was funneled into the market on Thursday and Friday alone, elevating total assets under management (AuM) to a year-to-date high of $40.4 billion.

Regional and Asset-Specific Inflows

The United States dominated regional inflows, contributing $1.8 billion. Germany, Switzerland, and Brazil followed with $51.6 million, $47.3 million, and $9.3 million, respectively. Despite the overall positive trend, Hong Kong experienced minor outflows of $3.1 million.

Bitcoin (BTC) led the inflow tally with $977 million, while Ethereum (ETH) followed closely with $772 million. The year-to-date inflows for Ethereum have reached a record $12.6 billion, pushing its total AuM to an all-time high of $40.3 billion. Meanwhile, short-bitcoin investment products faced challenges, with $3.5 million in outflows, reducing their total AuM to a multi-year low of $83 million.

Other Noteworthy Inflows

Solana (SOL) and XRP also attracted significant investor interest, with inflows of $127.3 million and $69.4 million, respectively. The positive sentiment towards these digital assets is indicative of a broader market confidence following the Fed’s rate adjustment.

Overall, the digital asset market appears to be on a path to match or even exceed last year’s inflows of $48.6 billion, reflecting growing investor interest and confidence in the sector’s potential amidst changing economic policies.

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