FameEX Hot Topics | Bitcoin Leads $321M Crypto Inflows After Fed Rate Cut

Cryptocurrency investment products have seen significant inflows following the U.S. Federal Reserve's decision to reduce interest rates, as reported by crypto investment firm CoinShares. Digital asset investment products experienced their second consecutive week of inflows between September 15 and 21, totaling $321 million. This figure is slightly down from the previous week's inflows of $436 million but still represents robust investor interest.

CoinShares attributes this surge to the Federal Open Market Committee's (FOMC) recent decision to cut interest rates by 50 basis points (bp). According to their latest weekly digital asset fund flows report, released on September 23, Bitcoin based investment products were the main beneficiaries, attracting $284 million in inflows. The report also highlighted growing interest in short Bitcoin investment products, which accumulated $5.1 million in inflows following recent BTC price changes.

On September 18, the Federal Reserve announced the FOMC's decision to lower interest rates by 50 bp, marking the first reduction in borrowing costs since March 2020, when the Fed acted in response to the COVID-19 pandemic. This rate cut sparked positive momentum in crypto markets, as noted by CoinShares, resulting in a 9% increase in total assets under management. Additionally, total investment product volumes rose by 9% from the previous week, reaching $9.5 billion.

Bas Kooijman, CEO and asset manager of DHF Capital, commented that the 50 bp rate cut could extend the uptrend in gold prices, which are poised to reach new highs due to other supporting factors. He stated, "The decision acts as a start to the interest rate cut cycle that markets have been waiting for a long time now and could fuel appetite for assets like gold and others." Kooijman also suggested that the magnitude of the cut could pave the way for more aggressive actions in the coming months. "The Federal Reserve’s dot plot shows a steeper decline in interest rates than previously forecast by the central bank. This trajectory could further cement gains in gold prices," he added.

Overall, the Fed's recent rate cut has generated optimism in both the cryptocurrency and traditional financial markets, signaling potential growth for investment products tied to Bitcoin and other digital assets.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.