Bitcoin Rises Draw $321 Million Crypto Inflow After Interest Rates Drop
2024-09-24
Bittime - Discover how a 50 basis point cut in interest rates by the FOMC on September 18, 2024 triggered crypto fund flows, with Bitcoin recording an inflow of $321 million and BTC investment products attracting $284 million.
Meanwhile, Ethereum experienced outflows for five consecutive weeks. Read more about the impact of monetary policy on digital asset markets!
Impact of Lower Interest Rates
In its latest weekly digital asset fund flows report, released on September 23, CoinShares stated that the Federal Open Market Committee's (FOMC) decision to cut interest rates by 50 basis points (bp) was a factor that may have contributed to this increase.
Bitcoin Rise Pull $321 Million Inflows
According to a CoinShares report, Bitcoin (BTC)-based investment products were the main focus last week, with $284 million in inflows.
Recent BTC price changes led to greater inflows into short Bitcoin investment products, which generated a total of $5.1 million.
The digital asset reached $321 million for the second week in a row from September 15 to September 21, 2024.
Ethereum Outflows Report
In contrast, CoinShares stated that Ethereum, like Ether, continues to be an outlier. ETH-based investment products have experienced outflows for five consecutive weeks, reaching $29 million last week.
Read Also: Bitcoin Prices Rise After Federal Reserve Cut Interest Rates
Interest Rates Reductions Announcement
Last September 18, the US Federal Reserve issued a FOMC statement, officially announcing the Board of Governors' decision to approve a 50bp interest rate cut.
This is the first decline in US borrowing costs since March 2020, when the Federal Reserve cut interest rates as a result of the COVID-19 outbreak.
According to CoinShares, the crypto market responded to the interest rate drop with a 9% increase in total assets under management and a slight 9% increase in total investment products from $9.5 billion the previous week.
Conclusion
The FOMC rate cut by 50 basis points on September 18, 2024 triggered a second consecutive week of fund flows into digital asset markets.
Bitcoin recorded an inflow of $321 million. While Bitcoin-based investment products generated $284 million.
Ethereum generated $29 million. The number of assets under management in the crypto market increased by 9% as a result of this drop in interest rates.
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