Last week marked a significant shift in the investment landscape as the Federal Reserve announced a reduction in interest rates, prompting a surge in digital asset fund investments. CoinShares reported an impressive $1.9 billion in fresh inflows, primarily driven by the 25 basis-point rate cut that was revealed during the September FOMC meeting. This policy adjustment signaled to investors that risk assets might thrive under more favorable financial conditions.
James Butterfill, the head of research at CoinShares, observed that market traders exhibited initial caution, interpreting the announcement as a “hawkish cut.” However, as the implications of the Fed’s decision settled, sentiment in the market shifted positively. Butterfill noted that inflows began to gain momentum later in the week, with $746 million pouring in on Thursday and Friday alone.
The heightened interest has pushed the total assets under management (AUM) in crypto investment products to an impressive $40.4 billion—the highest figure recorded for the year. Should the current trend continue, 2025 could see total investments rivaling or even exceeding last year’s figure of $48.6 billion.
Bitcoin emerged as a leading force, capturing $977 million in inflows, making it the third consecutive week of net inflows for the cryptocurrency after it surpassed Ethereum as the favored asset. Thus far in October, Bitcoin-focused funds have seen inflows totaling nearly $4 billion, contributing to a substantial year-to-date figure of $24.7 billion. Currently, these funds manage assets worth over $183 billion within their portfolios.
In contrast, interest in short-Bitcoin products has waned, with these funds losing $3.5 million last week and reaching a multi-year low of $83 million in assets under management. The downturn in short-Bitcoin investment can be attributed to a prevailing reluctance among investors to bet against Bitcoin, particularly as the loose monetary policy seems to favor risk-on trades.
Meanwhile, the altcoin segment garnered significant attention, with these digital assets collectively attracting approximately $1 billion in inflows last week. Ethereum, the second-largest cryptocurrency by market capitalization, led the way with $772 million in fresh capital, bringing its year-to-date total to $12.6 billion and elevating assets under management in Ethereum-related products to a record $40.3 billion.
Smaller digital assets also saw notable inflows, with Solana products gaining $127.3 million and XRP funds drawing in $69.4 million, pushing both assets beyond the $1.5 billion mark for 2025 inflows. Other altcoins such as Cardano, Sui, Litecoin, and Chainlink shared a more modest interest with a combined inflow of around $6 million, reflecting a more measured but widespread investor engagement across diverse digital assets.
