Crypto fund inflows are running positive again after a three-week lull period, with the vast majority of capital rushing into Bitcoin (BTC).
The renewed interest follows the release of inflation figures for July, which came in slightly better than expectations.
Bitcoin Funds Back In Profit
According to CoinShares’ weekly digital asset flows report, inflows to crypto funds totaled $28.5 million last week, with $27 million heading into Bitcoin. This follows a three-week period in which Bitcoin experienced $144 million in net outflows.
Other digital assets including Ether (ETH) and XRP also scored inflows last week of $2.5 million and $0.5 million respectively. The latter is now on its sixteenth week of consecutive inflows, with assets under management rising by 127% since the year began.
“We believe the improved sentiment is due to the recent US inflation data, which was slightly below expectations, signifying that a September rate hike is less likely,” CoinShares wrote.
Bitcoin and other digital assets fell consistently last year as the Federal Reserve embarked on the fastest rate hiking cycle in history, in order to quell record-high inflation.
With CPI back down to 3.2% year over year, the Fed’s hiking cycle may finally have peaked, potentially marking a good time to invest. According to CME FedWatch Tool, the market i pricing in an 88% chance that the Fed will keep rates flat at 5.25% at its next September meeting.
The Bank of Canada – which closely tracks the decisions of the Federal Reserve – is also expected to keep its rate flat at 5% until the end of the year. CoinShares’ report noted that most crypto inflows last week ($24 million) went to Canada’s Purpose ETF, the world’s first Bitcoin spot ETF.
The only other country to see substantial inflows was Switzerland, at $7.9 million.
Excitement over a potential U.S. Bitcoin spot ETF began growing in June after BlackRock filed for the product, followed by Fidelity and others. The hype not only sent BTC above $30,000 but led to multiple weeks of inflows to Bitcoin funds totaling $742 million.
ETF analysts at Bloomberg currently assign a 65% likelihood of a Bitcoin spot ETF being approved in 2023.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.