Money Keeps Flowing into Crypto, DXY Index Boosts Bitcoin

For the fourth straight week, cryptocurrency products are luring investments, fueled by mounting expectations for the green light on a Bitcoin exchange-traded fund (ETF) in the United States. The latest data from CoinShares' weekly fund flows report indicates that Bitcoin products remain at the forefront, accounting for a significant 84% of the overall investment influx.

Money Keeps Flowing Into Crypto, Dxy Index Boosts Bitcoin_65b966a722ca8.webp

Money Continues to Flow into the Crypto Market

Crypto products continue to attract investment for the fourth consecutive week, driven by growing anticipation for the approval of a Bitcoin exchange-traded fund (ETF) in the United States. According to CoinShares’ weekly fund flows report, Bitcoin products led the way in attracting investments, capturing 84% of the total funds.

CoinShares’ fund flows report for the week ending October 20th disclosed that a total of $179 million flowed into digital asset investment products, contributing to a cumulative assets under management of $33 billion.

Of these inflows, $55.3 million, or 84%, were directed towards Bitcoin investment products, bringing the year-to-date Bitcoin product inflows to $315 million.

It seems that the anticipation of a spot #Bitcoin ETF has prompted further inflows for the 4th consecutive week. Here is our analysis with @Jbutterfill.

🟢 Week 43 inflows: US$66m

🔎 Inflows are relatively low in comparison to June’s @BlackRock announcements, suggesting more… pic.twitter.com/6AkDGQJVOh

— CoinShares (@CoinSharesCo) October 23, 2023

James Butterfill, the Head of Research at CoinShares, noted that while these recent inflows can be attributed to the anticipation surrounding a spot Bitcoin ETF launch in the United States, they fall short of the levels witnessed earlier this year when BlackRock first announced its intention to create a spot Bitcoin ETF.

In June, during a four-week span, the sector saw a staggering $807 million inflow, suggesting that investors are currently adopting a more cautious approach.

On the other hand, Solana products attracted the second-largest share of inflows last week, netting $15.5 million. However, Ether products experienced outflows of $7.4 million, marking the only instance of outflows among altcoins for the week.

money keeps flowing into crypto dxy index boosts bitcoin 65b966a7282e0

More recently, interest in a spot Bitcoin ETF surged on October 23rd, driven by positive developments regarding BlackRock’s ETF approval prospects and a U.S. Appellate Court mandate directing the Securities and Exchange Commission to review Grayscale’s spot Bitcoin ETF filing.

This news catalyzed a 14% surge in Bitcoin’s price over the past 24 hours, briefly pushing it above $34,000 for the first time since May 2022.

The price increase also resulted in over $193 million in Bitcoin short positions being liquidated within the past 24 hours, according to CoinGlass data.

Dollar Dips Ahead of Key US Data

The US dollar weakened against a basket of currencies on Tuesday, reflecting a decline in Treasury yields as investors anxiously awaited critical US economic data ahead of the Federal Reserve’s upcoming monetary policy meeting.

The dollar index was last seen at around 105.57, having slipped more than 0.5% in the previous session as US Treasury yields declined.

The greenback had found support the previous week when Fed Chair Jerome Powell suggested that the strength of the US economy might justify tighter financial conditions, pushing the benchmark 10-year yield above 5%, its highest level since July 2007.

money keeps flowing into crypto dxy index boosts bitcoin 65b966a76883f

Bitcoin regained the market’s attention as its value soared on speculation that the United States might soon approve a bitcoin exchange-traded fund (ETF).

Market focus has now shifted to some of the final pieces of US economic data before the Fed’s meeting scheduled for October 31 – November 1. This includes the flash purchasing managers’ index (PMI) set to be released later on Tuesday and the gross domestic product (GDP) data due on Thursday.

>>> Bitcoin Surges to $35K USD, Reaching Highest Level in Months

According to Matt Simpson, senior market analyst at City Index, the PMI data could shape market expectations ahead of the GDP report. He stated that “if the data leans far enough one way, it could trigger a robust rally or a breakdown in the dollar, especially since the Fed is in a blackout period” – a period during which restrictions are placed on public communications from central bank officials leading up to the policy meeting.

The Fed is widely anticipated to maintain its interest rates at the meeting next week.

Similarly, the European Central Bank is expected to keep its interest rates unchanged at their meeting on Thursday, after raising key interest rates by 25 basis points in September. The euro remained relatively stable at $1.0665, retaining its gains against the dollar from the previous day.

Amid the dollar’s retreat, the battered Japanese yen experienced some relief. The yen had touched the sensitive 150-level on both Friday and Monday and was last trading flat against the US dollar at 149.77. Traders view the 150 threshold as a possible trigger for Japanese authorities to intervene in the currency market.

money keeps flowing into crypto dxy index boosts bitcoin 65b966a7a6992

However, if strong US data is reported this week, it could push the yen back towards the danger zone. Kyle Rodda, senior financial market analyst at Capital.com, noted that “the yen will be particularly sensitive to strong US data, especially if it pushes Treasury yields past the apparent key resistance level of around 5%.”

5.0/5

(100 votes)

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest

Bingx Announces Listing Of Swarm Markets (smt)

Altcoin | Editor Choice

BingX Announces Listing of Swarm Markets (SMT)

BingX exchange announces the listing of Swarm Markets (SMT) - a DeFi platform licensed by the Germany's Federal Financial Supervisory Authority (BaFin).

Azcnews Nigeria Confirm

News | Editor Choice | Policy & Regulations

Central Bank of Nigeria Confirms Not Blocking Crypto Users

The Central Bank of Nigeria (CBN) has officially confirmed reports of their freezing of user accounts on platforms such as Bybit, OKX, Kucoin, and Binance as fraudulent.

Azcnews President Joe Biden Proposes Highest Tax Rate In History

News | Editor Choice | Policy & Regulations

President Joe Biden Proposes Highest Tax Rate in History

US President Joe Biden has just proposed increasing capital gains tax to 44.6%, marking the highest federal capital tax rate ever.

Bitcoin Dip 64500

News | Bitcoin | Editor Choice

Bitcoin Dips to $64,500, Yet Scarcity Remains High

Despite Bitcoin dipping slightly to $64,500 currently, most experts believe that prices will soon enter a bullish cycle.

What Is Gas Fee

Blockchain | Editor Choice | Research

What is Gas Fee? A Guide to Optimizing Gas Fees Effectively

In any blockchain environment, Gas fees play a crucial and nearly irreplaceable role. So, what is Gas fee? How can you optimize Gas fees? Let's find out!