Drivers of $533 Million Inflows Explained

Digital asset investments totaled $533 million over the last seven days, marking the largest inflows in five weeks. Bitcoin (BTC) led with $543 million in inflows, while Ethereum (ETH) recorded outflows of $35.7 million.

Analysts suggest that the Bitcoin bull market is now in motion, with the biggest cryptocurrency targeting $65,000. The final phase of the bull market is expected to begin once the dollar index breaks below key support level.

Crypto Investments Hit $533 Million Last Week

Rising capital inflows into crypto investment products signal growing recognition of Bitcoin, reinforcing its status as a legitimate investment asset. This trend explains the recent BTC price surge, leading analysts to speculate about the start of a new bull market.

The latest CoinShares report attributes these massive inflows to recent dovish comments from Federal Reserve Chair Jerome Powell.

“Last week, digital asset investment products saw inflows totaling US$533m, marking the largest inflows in five weeks. This surge followed remarks by Jerome Powell at the Jackson Hole Symposium,” the report read.

A key highlight in Powell’s speech was the indication of a possible first interest rate cut in September. The Federal Reserve chair also expressed confidence that inflation is steadily moving toward the 2% target set by policymakers.

Bitget Wallet COO Alvin Kan recognized the recent capital inflows into crypto investment products and highlighted the Fed’s influence on this trend. He noted that the current economic environment remains characterized by high interest rates.

In his view, a significant Bitcoin price breakout will only be possible when the Fed begins cutting rates and market activity fully recovers.

“The Federal Reserve’s announcement of potential rate cuts could lead to increased market liquidity. In the long run, a decrease in US interest rates could weaken the dollar, reducing its attractiveness as a funding currency for carry trades and potentially destabilizing emerging markets that rely on capital inflows. At the same time, a weaker dollar could benefit emerging markets by making their exports more competitive,” Kan told BeInCrypto.

Read more: How to Protect Yourself From Inflation Using Cryptocurrency

If Bitcoin ETFs continue to attract net inflows this week, BTC could stabilize above the $64,000 level, setting the stage for further gains. Following Powell’s speech, traders are also keeping a close eye on key US economic events this week for signals that could confirm the next directional move.

Matrixport reports that analysts are watching stablecoin minting as a possible boost for Bitcoin. BeInCrypto noted a recent increase in stablecoin minting, with Tether replenishing its inventory, likely to meet growing demand. This aligns with recent market rallies, suggesting that these issuances could be helping to drive crypto momentum.

Matrixport’s data shows stablecoin minting played a role in Bitcoin reaching $65,000 on Sunday. The report highlights consistent stablecoin printing over the last two to three weeks, serving as a key entry point for new money into the crypto market.

“Stablecoin minting drives BTC to $65,000. Robust stablecoin minting is the main force behind Bitcoin’s rise, suggesting institutional influence surpasses macroeconomic factors,” the report read.

Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach

Noteworthy, the stablecoin market capitalization has reached an all-time high above $168 billion, indicating growing liquidity in the market. The combination of positive ETF inflows and the surge in stablecoin market cap suggests that institutional investors might be fueling the current rally.