In a significant shift in the crypto investment landscape, digital asset funds witnessed a notable trend reversal, recording outflows last week for the first time since mid-June, according to a report by CoinShares. Bitcoin (BTC) investment products, which repeatedly saw weeks of massive inflows, experienced a $13 million outflow. Instead, investors turned their attention to funds focusing on smaller cryptocurrencies like Ether (ETH) and Ripple’s XRP.
A Noteworthy Turnaround in Crypto Asset Investments
The week prior to the outflows, digital asset funds had seen significant inflows totaling $742 million over four weeks. However, the positive momentum for BTC investment products came to a halt as investors seemingly ran out of positive catalysts to support further inflows. Major events, such as BlackRock’s filing for a BTC exchange-traded fund and XRP’s partial court victory over the SEC, had driven investor interest, but these factors lost their momentum.
ETH Takes the Lead, XRP Gains Confidence
Among all cryptocurrencies, ETH-focused investment products enjoyed the largest inflows, totaling $6.6 million. The surge in inflows indicates an improved sentiment for the second-largest crypto asset, as James Butterfill, head of research at CoinShares, pointed out. XRP funds also experienced $2.6 million of inflows, totaling $6.8 million over the last 11 weeks, representing 8% of all assets under management inflows. This increase in XRP confidence was attributed to its favorable legal ruling and growing investor optimism in altcoins.
Altcoin Funds Witness Positive Flows
Smaller altcoins like Solana (SOL), UniSwap (UNI), and Polygon (MATIC) also saw positive flows in their respective funds, with inflows of $1.1 million, $0.7 million, and $0.7 million.
Crypto Markets Show Mixed Movements Ahead of Fed Meeting
In response to the changing dynamics in the crypto space, the overall cryptocurrency markets were trading lower on Tuesday. Bitcoin dipped to $29,120, with Ethereum just above the $1,850 level. XRP, Cardano, Litecoin, Polygon, and Solana were among the top crypto tokens trading lower. The total global cryptocurrency market cap fell to around $1.17 trillion, marking a 1.85% decrease in the last 24 hours.
Market sentiment appears to be affected by the upcoming US Federal Reserve’s monetary policy decision, leading to cautious trading in the crypto space.
Experts Predict a Potential BTC Rally
Vikram Subburaj, CEO of Giottus Crypto Platform, commented on Bitcoin’s current situation, stating that it is trading just above $29,000 with bearish momentum. He suggests that a rate hike by the US Fed could be contributing to this decline. BTC needs to hold $28,500 in case of further falls to regain lost value. However, Subburaj predicts a potential rally in the coming weeks once the market accepts the rate hike. Additionally, he highlights that BTC’s dominance remains below 50%.