Digital Asset Investment Products See $921 Million Inflows as Investors Expect Rate Cuts

Investors’ expectations that there will be further rate cuts in the United States helped drive global inflows to digital asset investment products to $921 million last week, CoinShares Head of Research James Butterfill reported Monday (Oct. 27).

By region, the U.S. saw the week’s largest inflows, at $843 million, followed by Germany at $502 million, according to the report. Switzerland had the week’s biggest outflows, at $359 million, which the report attributed to an asset transfer between providers.

“The ongoing U.S. government shutdown, and the resulting absence of key macroeconomic data, has left investors with little guidance on the direction of U.S. monetary policy,” Butterfill wrote. “However, the lower-than-expected [Consumer Price Index (CPI)] data released on Friday helped restore some confidence that further rate cuts are likely this year.”

By asset, Bitcoin saw inflows of $931 million, XRP gained $84.3 million and Solana picked up $29.4 million, according to the report. Ethereum saw outflows of $169 million.

Butterfill wrote in the report that Bitcoin’s inflows brought “cumulative inflows since the U.S. Federal Reserve began cutting interest rates to [$9.4 billion].”

Year to date, Bitcoin inflows stood at $30.2 billion, down from $41.6 billion last year, per the report.

PYMNTS reported Friday that the CPI data released by the Bureau of Labor Statistics showed the headline inflation rose 0.3% in September after rising 0.4% in August.

While the pace of increase slowed, essentials such as food and shelter are keeping inflation sticky and driving most of the strain for consumers who are managing their budgets month to month.

The University of Michigan’s Consumer Sentiment Index, which was also released Friday, showed that consumers are anticipating a rise in prices of 4.6%, down from the 4.7% seen in September.

Short-term inflation expectations have stabilized somewhat over the past four months after peaking at 6.6% in May, while those for annualized inflation in the five-year period ahead adjusted up for the third consecutive time.

Meanwhile, CoinShares announced on Sept. 8 that it was going public in the U.S. after entering into a special purpose acquisition company (SPAC) agreement valuing it at $1.2 billion.