Zinger Key Points
- CoinShares reports significant U.S. inflows totaling $416 million, with Europe contributing an additional $37.6 million combined.
- Bybit noted retail investors increased their Solana positions by 33.3% in July, reflecting optimism in DeFi projects.
Although the digital asset market experienced a significant reversal last week, with inflows reaching $436 million, Bitcoin BTC/USD is down to $58,700 in early Monday morning trading.
What Happened: After a prolonged period of outflows amounting to $1.2 billion, a shift in sentiment has reignited confidence in Bitcoin, which saw $436 million in inflows, ending a 10-day streak of outflows, according to Coinshares.
The turnaround is being attributed to shifting market expectations surrounding a potential 50 basis point interest rate cut by the Federal Reserve on Sep. 18, following remarks from former NY Federal Reserve President Bill Dudley.
Even so, Bitcoin is down 2% on Monday as markets try to price in the impact of an impending interest rate cut from the Federal Reserve.
Ethereum ETH/USD, on the other hand, saw continued outflows, with $19 million exiting the asset, likely due to concerns about the profitability of Layer- 1 blockchains following Decun. It is down over 4% on Monday, trading around $2,300.
By contrast, Solana SOL/USD, emerging as a rising star in the crypto space, recorded its fourth consecutive week of inflows, totaling $3.8 million. Solana is down 2.7%, trading around $132.
Why It Matters: CoinShares' data also highlights regional trends, with the U.S. leading the way, seeing $416 million in inflows, while Europe—especially Switzerland and Germany—contributed another $37.6 million combined.
However, Canada bucked the trend with $18 million in outflows.
The inflows into Bitcoin and the growing preference for the cryptocurrency have been further supported by Bybit‘s Q3 report, which emphasized Bitcoin’s dominance in investors’ portfolios.
Bitcoin now accounts for 27.5% of all crypto assets held by users, up from 25.7% in April 2024, largely due to the Bitcoin halving event and increasing institutional interest.
The report also noted that, although Ethereum remains a critical asset in many portfolios, its performance has lagged compared to Bitcoin and Solana, with investors showing a marked preference for Bitcoin as a more stable investment during uncertain market conditions.
Solana’s growth, particularly among retail investors, signals its growing influence as a viable alternative to Bitcoin and Ethereum.
Bybit’s report highlighted that Solana has become the third-largest crypto asset held by users, with retail investors increasing their positions by 33.3% in July.
The growing decentralized finance (DeFi) ecosystem on Solana has drawn considerable attention, bolstered by the platform's successful liquid staking and DeFi projects.
What’s Next: Looking ahead, Benzinga’s Future of Digital Assets event on Nov. 19 will dive into how these market trends, including Bitcoin’s dominance, Ethereum’s struggles, and Solana’s rise, will shape the future of digital assets.
Read Next:
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
