Key Points
- Crypto investment products recorded a $2 billion inflow in the first week of June, taking the five-week total to over $4.3 billion.
- Bitcoin (BTC) and Ethereum (ETH) experienced significant inflows, with Bitcoin seeing $1.97 billion and Ethereum having its best week since March with $69 million.
In the initial week of June, inflows into crypto asset investment products reached a total of $2 billion. This surge has brought the five-week inflow total to more than $4.3 billion.
Furthermore, the trading volumes across all crypto ETPs last week reached an impressive $12.8 billion, marking a significant 55% increase from the previous week.
Shift in Investment Sentiment
Almost all providers have seen inflows, along with a noticeable decrease in outflows from incumbent providers. This change in sentiment is attributed to weaker-than-expected macroeconomic data from the United States. The upcoming Fed rate cut decision this week has garnered attention, as the US is set to release its CPI and PPI figures for May.
The positive price action has led total assets under management (AuM) to exceed the $100 billion mark for the first time since March this year.
Bitcoin and Ethereum Inflows
Bitcoin (BTC) continues to be the primary focus, with inflows totaling $1.97 billion for the week. However, short-Bitcoin saw outflows for the third consecutive week, amounting to $5.3 million. Ethereum (ETH) had its best week of inflows since March, reaching $69 million. This increase is likely a response to the unexpected SEC decision to permit spot-based ETFs.
Bitcoin and Ethereum prices remained stable over the last weekend, with open interest and trading volumes decreasing after a $400 million leverage flush out on Friday. The crypto market is expected to see a return of volatility amid the CPI release on Wednesday.
A record build-up of leverage in Bitcoin futures impacted bulls as the market dropped on Friday following the release of non-farm payrolls (NFP) data. The NFP data exceeded expectations, with the US economy adding 275,000 jobs compared to the anticipated 185,000. Consequently, Bitcoin experienced a sharp decline, falling from $71,000 to $69,000. The jobs data has reduced the likelihood of immediate rate cuts by the Fed.
Despite this, QCP Capital maintains that the Fed won’t keep interest rates high for a prolonged period. Last week, the European Central Bank and the Bank of Canada announced rate cuts, triggering the monetary easing cycle.
