1. Bitcoin vs. Ethereum: $284M Inflows and $29M Outflows
2. Impact of Rate Cut on the Market
3. Gold Market Also Reacts

Cryptocurrency investment products have experienced substantial inflows following the US Federal Reserve’s decision to lower interest rates, according to CoinShares.

Bitcoin vs. Ethereum: $284M Inflows and $29M Outflows

According to CoinShares, Bitcoin (BTC)-based investment products were the primary focus last week, with $284 million in inflows. The report mentioned that recent BTC price changes triggered growing inflows into short-Bitcoin investment products, totaling $5.1 million. On the other hand, Ethereum (ETH) remained an “outlier,” CoinShares noted, as Ether-based investment products saw outflows for the fifth consecutive week, totaling $29 million last week. CoinShares’ analysis indicated that the repeated ETH outflows were due to persistent outflows from the Grayscale Ethereum Trust (ETHE) and insufficient inflows from the newly issued exchange-traded funds. Additionally, CoinShares noted that Solana (SOL) investment products continued to see small but consistent weekly inflows, amassing $3.2 million last week.

Impact of Rate Cut on the Market

The US Federal Reserve issued an FOMC statement on Sept. 18, officially announcing the Board of Governors’ decision to approve a 50 bp decrease. The decision marked the first time the United States reduced borrowing costs since March 2020, when the Fed cut interest rates over the COVID-19 outbreak. According to CoinShares, the rate cuts have fueled a positive reaction in crypto markets, with total assets under management surging 9%. Total investment product volumes also edged up 9% from the previous week to reach $9.5 billion.

Gold Market Also Reacts

Following the rate cuts, investors have also been increasingly buying gold, with the price steadily seeing new all-time highs. On Sept. 23, spot gold hit a new record high of $2,629 per ounce, following a gain of more than 5% over the past two weeks. According to Bas Kooijman, CEO and asset manager of DHF Capital, the 50 bp rate cut could help extend the uptrend in gold prices, which could continue to see new records thanks to other additional supporting factors. Kooijman stated: “The decision acts as a start to the interest rate cut cycle that markets have been waiting for a long time now and could fuel appetite for assets like gold and others. The size of the cut also opens the way for more aggressive actions in the coming months.”

The US Federal Reserve's decision to lower interest rates has caused positive changes in the cryptocurrency and gold markets. Bitcoin saw significant investment inflows, while Ethereum continues to face outflows. Gold demonstrated new record prices, which could be connected to further rate cuts in the future.