Inflows of more than $1 billion fuel ETF rally, price surpasses $71,000

Lower-than-expected inflation data and a Bitcoin dominance have led to a cautious return to crypto investing, with the US leading the way. However, whispers of regulatory scrutiny cast a shadow over Ethereum, leading to outflows from the world’s second-largest cryptocurrency.

CoinShares, a leading digital asset manager, reports a second consecutive week of positive inflow for crypto investment products, totaling $932 million. Bitcoin, the ever-controversial “digital gold” that has surpassed the $71,000 level in as many weeks, is the clear frontrunner, attracting a whopping $942 million.

This bullish sentiment seems to be related to recent developments US Consumer Price Index (CPI) report, which fueled hopes for a less aggressive rate hike by the Federal Reserve. Historically, lower interest rates have been seen as beneficial for riskier assets like Bitcoin.

US Flexes Its Bitcoin Muscle

The United States has strengthened its position as a global crypto hub. The US ETF market, a relatively new player in the game, took the top spot with inflows of over $1 billion.

Even Grayscale, A major crypto investment firm that had witnessed nearly $17 billion in outflows since launching a Bitcoin ETF in January saw a glimmer of hope with its first small inflow of $18 million.

Source: Coin shares

This signals a possible shift in investor sentiment, with some possibly viewing the established Grays as a safer bet compared to the newer ETF.

A mixed bag for Altcoins and regional players

While Bitcoin is in the spotlight, other cryptocurrencies present a mixed picture. Solana (SOL), Chainlink (LINK) and Cardano (ADA) – all prominent altcoins – managed to attract modest inflows of almost $5 million, $3.7 million and almost $2 million respectively.

However, Ethereum, the oft-touted “king of the altcoins,” is in a precarious position. Ethereum-based investment products saw worrying outflows of more than $23 million.

Bitcoin is now trading at $70,836. Graphic: Trading view

This negativity could stem from the US Securities and Exchange Commission’s (SEC) looming decision on a possible Ethereum spot-based ETF. Regulatory uncertainty tends to frighten investors, and the SEC’s verdict remains to be seen.

Lower volumes indicate cautious optimism

Despite the positive inflow, an important indicator paints a slightly different picture. Trading volumes for the week were significantly lower compared to March, a time when a peak of $40 billion was seen.

This indicates a cautious approach by investors. While they may be dipping their toes back into the crypto pool, they are likely doing so in measured steps, wary of the market’s inherent volatility.

Today’s crypto landscape reflects a complex interplay of economic data, investor sentiment and regulatory hurdles. Bitcoin, fueled by hopes for a dovish Fed, appears to be regaining some ground. The US market maintains its dominance, but other regions are struggling with varying degrees of success.

Featured image from Pexels, chart from TradingView

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