Bitcoin Digital Asset Funds See $17M Inflow After 5-Week Dry Period – 24/7 Wall St.

After five weeks of outflows, Bitcoin digital asset funds saw inflows totaling $17 million last week. On the other hand, Ethereum products continued to see outflows despite the much-hyped Merge upgrade, which amounted to $15 million last week and a total of $80 million in the past month.

Low activity: Investors exercise caution after merger

A recent report from digital investment company CoinShares reveals that investors are cautious about their digital investments after the merger. The report revealed that overall activity was low over the past week, with Ethereum seeing negative flows while Bitcoin experienced positive flows.

More precisely, Bitcoin saw inflows totaling $17 million, which came after a 5-week streak of outflows totaling $93 million. “Meanwhile, short bitcoin also saw smaller inflows totaling $2.6 million with total assets under management near a record $169 million,” the report said.

Ethereum investment products, on the other hand, had negative flows. The second largest cryptocurrency saw outflows totaling $15 million. Notably, this is the fourth week in a row for Ethereum to see negative flows, which now total $80 million.

Cumulatively, digital asset investment products had positive flows of about $7 million last week. The figure highlights a lack of activity and engagement among investors, which can be related to the Fed’s hawkish stance. The report said:

“Digital asset investment products had inflows totaling US$7 million last week, another week of low activity. The mix of positive and negative flows by provider and asset suggests a continued lack of engagement among investors at present. We have recently written about crypto prices and their relationship to the USD, with hawkish rhetoric from the FED hindering potential gains in crypto.”

Meanwhile, multi-asset investment products continue to be the best performers during this crypto winter. With just a few weeks of outflows, multi-asset investment products have seen inflows of about $224 million so far this year, “suggesting that investors are seeking safety in numbers.”

Crypto prices fall ahead of the Fed’s interest rate decision

The majority of the crypto market is trading in the red, with major cryptocurrencies down at least 6% in the last 24 hours. The leading cryptocurrency has fallen to around $18,500, its lowest level so far this year. Ethereum has also extended losses, plunging to around $1,300.

The red market can be attributed to the upcoming interest rate hike announcement from the US central bank. In an effort to tame inflation, Fed officials are expected to announce a third straight rate hike of 75 basis points during the two-day meeting that ends Wednesday.

Investors across both the crypto market and traditional stock markets are bracing for the announcement. However, some analysts believe that the upcoming 75 bps rate hike has already been priced in, and argue that Bitcoin is forming a bottom.

First, crypto market analyst DrProfitCrypto has told his over 35,000 Twitter followers that the leading cryptocurrency has entered a “bottom phase” where he expects the price to remain stable between $18,000 and $25,000 until March 2023.

However, the analysts warned that an interest rate increase of 100 bps will further worsen market conditions. Notably, according to data from the CME Group’s FedWatch Tool, there is only a 20% chance of a 100 bps rate hike.

This article originally appeared on The Tokenist