The past few months have seen price spikes for most cryptocurrencies, restoring investor interest in the sector. In its recent data, CoinShares showed that investment products backed by digital assets like NFTs and cryptocurrencies managed to raise $932 million (roughly Rs. 7,766 crore) in last week’s four-day period between May 13 and 17. This influx of capital into the digital asset arena came shortly after the US Department of Labor’s Bureau of Labor Statistics released Consumer Price Index (CPI) data, which suggested that the inflation rate recorded in April is showing signs of easing.
“Inflows were an immediate response to Wednesday’s lower-than-expected CPI report, with the last three trading days of the week accounting for 89 percent of total flows, underscoring our view that Bitcoin prices have reconnected with interest rate expectations,” CoinShares The research blog states in a blog post published on Medium on May 20.
Weekly investments in Grayscale, iShares ETFs, Fidelity ETFs, Ark 21 Shares, ProShares ETFs and Bitwise ETFs were all up significantly last week in the US. BTC ETFs offered by Fidelity saw a maximum capital inflow of $344 million (roughly Rs. 2,866 crore).
Based on US inflation data, several cryptocurrencies rose in value this week. Bitcoin, for instance, touched the $67,000 (roughly Rs. 55.8 lakh) mark on international exchanges a day ago, after going through a period of stagnation around the $63,000 (roughly Rs. 52.4 lakh) price point for the first fifteen on the day of May. According to data shared by CoinShares, investments in Bitcoin last week stood at a whopping $942 million (roughly Rs. 7,849 crore).
Solana, Litecoin, Cardano and Chainlink have also managed to garner investment in recent days alongside Bitcoin.
Ether, meanwhile, has not performed as impressively as BTC in the markets. According to the CoinShares blog, “Ethereum continues to suffer losses on prospect of SEC approval of spot ETF this week with further outflows of USD 23 million (roughly Rs 191 crore).”
Cryptocurrency investments rose the most in the US last week. Australia, Brazil, Germany and Switzerland have emerged as other countries that have seen positive sentiment towards cryptocurrencies among investors in recent days. Meanwhile, Hong Kong and Canada saw cryptocurrency outflows totaling $83 million (roughly Rs. 691 crore) and $17 million (roughly Rs. 141 crore), respectively.
Against the backdrop of this significant capital inflow into digital asset-backed industrial products, Bitcoin saw a mega rally on Tuesday, May 21 when it crossed the $71,000 mark (roughly Rs. 59 lakh).
“Investors gave BTC a much-needed boost after reports from big names like Morgan Stanley, JPMorgan, Wells Fargo, UBS, BNP Paribas, Royal Bank of Canada and hedge funds like Millennium Management and Schonfeld Strategic Advisors revealed their large holdings Bitcoin ETFs. Bitcoin could test the $74,000 level (roughly Rs. 61.6 lakh) in the coming weeks if the current momentum continues. The euphoria surrounding Bitcoin Pizza Day tomorrow could add to the already buoyant investor sentiment,” Shivam Thakral, CEO of Indian crypto exchange BuyUcoin told Gadgets360.
