Digital asset investment products experienced a significant influx of $321 million last week, marking their second consecutive week of positive flows. This surge is largely attributed to the Federal Open Market Committee’s (FOMC) recent decision to adopt a more dovish monetary policy, including a surprise 50 basis point interest rate cut, according to a report from CoinShares.
The FOMC’s move has generated renewed optimism in the digital asset market, pushing total assets under management (AuM) to rise by 9%, now reaching $9.5 billion.
U.S. Leads in Digital Asset Inflows
Regionally, the United States led the charge with $277 million in inflows, followed by Switzerland, which saw $63 million, marking its second-largest weekly inflows this year. In contrast, some countries experienced outflows, including Germany ($9.5 million), Sweden ($7.8 million), and Canada ($2.3 million).
Bitcoin was the clear winner among digital assets, attracting $284 million in inflows. Notably, short-Bitcoin investment products also saw $5.1 million in inflows, indicating that some investors are hedging their bets despite the bullish sentiment.
Ethereum, on the other hand, continued its decline, suffering outflows of $29 million for the fifth consecutive week. This trend has been attributed to withdrawals from the Grayscale Trust and limited interest in newly launched Ethereum ETFs. Meanwhile, Solana demonstrated resilience, bringing in steady inflows of $3.2 million despite the overall market volatility.
Kamala Harris Signals Support for Crypto
On the political front, U.S. Vice President Kamala Harris made headlines by expressing support for emerging technologies, including artificial intelligence and digital assets. Speaking at a fundraiser, Harris vowed to promote investments in the cryptocurrency sector, sparking optimism within the digital asset community.
High-profile crypto advocates, such as Anthony Scaramucci, have publicly praised Harris for her pro-crypto stance. Her comments, combined with positive macroeconomic factors, have provided a strong tailwind for the digital asset market, which saw nearly $60 million in short liquidations early in the week.
Bitcoin’s Rally and Market Outlook
Since last Monday, Bitcoin has experienced a near 12% rebound, currently trading around $63,500. This upward momentum aligns with previous predictions from QCP Capital, which anticipated a potential 13.8% rally from Bitcoin’s lows of $57,500. The bullish sentiment is also reflected in the options market, where the typical frontend Put skew is beginning to normalize as investors seek to capitalize on topside opportunities.
In addition, major exchanges are reporting improving funding rates, and basis yields are becoming increasingly attractive in light of the recent interest rate cuts.
Investment Opportunity: Sharkfin Product
For investors looking to take advantage of the current bullish trend heading into the fourth quarter, QCP Capital has recommended considering a Principal Protected Sharkfin product. This investment offers potential returns of over 96% per annum with no downside risk. The product is set to mature on December 27, 2024, with a strike price of $80,000 and a barrier of $100,000, based on the current Bitcoin spot price of $63,500.
With the market sentiment shifting and key macroeconomic and political factors in play, the digital asset market appears primed for continued growth in the months ahead.
