Cryptocurrency investment products have broken a four-week slide that saw institutions pull a massive $5.5 billion from the market. The investment vehicle category, known as Exchange-Traded Products (ETPs), recorded a spectacular turnaround last week by drawing $1.07 billion in fresh money.
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This abrupt surge in institutional optimism is being attributed to renewed hopes for a potential US interest rate cut. CoinShares’ head of research, James Butterfill, cited comments from a Federal Open Market Committee (FOMC) member suggesting monetary policy remains restrictive, which raised hopes for a rate cut this month.
XRP Sees Largest Inflows On Record
While the entire ETP sector rebounded, the standout performer was XRP (XRP-USD), which posted its largest weekly inflows on record. XRP funds pulled in a massive $289 million last week, second to Ether (ETH-USD) and Bitcoin (BTC-USD).
The strong performance of XRP funds is linked directly to recent regulatory advancements and the launch of new US exchange-traded funds (ETFs), such as Canary Capital’s XRP ETF. XRP funds have now recorded nearly $790 million in month-to-date inflows, moving in the opposite direction of Bitcoin and Ether, which remain in negative territory for the month.
U.S. Market Drives The $1 Billion Rebound
The United States market was the overwhelming driver of this massive institutional reversal. The US alone drove almost $1 billion in new inflows, despite the typically subdued trading activity during the Thanksgiving week holiday.
Across assets, Bitcoin led the gains, pulling in $464 million last week, followed closely by Ether at $309 million. Among issuers, Fidelity (FIS) recorded the largest inflows at $230 million, with BlackRock’s (BLK) iShares also seeing a strong resurgence at $120 million.
Bitcoin Rally Proves Short-Lived
The rebound in crypto ETPs coincided with a short-lived rally across the broader cryptocurrency markets last week, which saw Bitcoin briefly push above the $90,000 price level. This upward momentum, however, quickly faded as the week closed.
Following the ETP reporting period, Bitcoin slipped back below $86,000 on Monday, confirming that the short-term rally was not sustainable. Despite the major institutional capital injection, both Bitcoin and Ether remain deeply in negative territory for the month, facing combined outflows of $4.2 billion.
Key Takeaway
Crypto ETPs have emphatically snapped their four-week losing streak by injecting over $1 billion in capital, signaling renewed institutional interest fueled by rate cut hopes. However, the market’s focus shifts to XRP, which is gaining historic market share and flows as Bitcoin and Ether struggle to overcome months of sustained institutional outflows.
Investors can track the prices of their favorite cryptos on the TipRanks Cryptocurrency Center. Click on the image below to find out more.
