CPI Report Triggers $932 Million Inflows into Crypto Investment Funds
Crypto News– Crypto-based investment products experienced significant inflows over the past week, marking the second consecutive week of positive flows following the recent market downturn.
According to CoinShares data, digital asset investment products accumulated $932 million between May 13 and 17. This surge was driven by the immediate response to the U.S. Consumer Price Index (CPI) report, which suggested that inflationary pressures were easing again. Despite the higher inflows, weekly trading volumes remained relatively low at $10.5 billion, a stark contrast to the $40 billion observed in March. The May 15 CPI report indicated that inflation rose by 0.3% in April, following a 0.4% increase in March. Year over year, the CPI grew by 3.4%, mainly due to significant increases in the energy and food sectors.
CoinShares Research previously noted that, following the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States in January, factors influencing Bitcoin’s price have realigned with market expectations around interest rates.
Inflows and Outflows in Altcoin and Ether Funds
According to CoinShares, a wide range of altcoin funds saw inflows over the previous week. Solana (SOL) saw net flows of $4.9 million, Chainlink (LINK) received $3.7 million, and Cardano (ADA) had $1.9 million in inflows. Conversely, Ether (ETH) funds experienced outflows of $23 million.
SEC Decision Impact on Ether
Ether prices remain under pressure due to concerns about how the Securities and Exchange Commission (SEC) will decide on spot Ether ETFs. The Commission’s first deadline for the crypto ETF is set to expire on May 23.
Revised Predictions for SEC Approval
Two ETF analysts, James Seyffart and Eric Balchunas, have revised their prediction regarding the SEC’s approval of spot Ether ETFs. Initially expecting a denial, the analysts now believe there is a 75% chance of approval after hearing new information about the SEC’s stance.
FAQs
What is the CPI report and why is it significant for the crypto market?
The Consumer Price Index (CPI) report measures the average change over time in the prices paid by consumers for goods and services. It is a key indicator of inflation. A lower-than-expected CPI can suggest that inflation is moderating, which can positively impact financial markets, including cryptocurrencies, as it may influence central bank policies on interest rates.
How much investment did crypto funds see following the CPI report?
Crypto investment funds saw an inflow of $932 million between May 13 and 17, following the release of the CPI report.
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