CoinShares Report Shows Crypto Market Sentiment Has Improved This Year
According to a CoinShares report published on Monday afternoon, investors are increasingly bullish on crypto assets. They poured more money into crypto funds in January than in previous months. The firm says that last week, the digital asset investment products recorded inflows amounting to over $70 million.
Most of the investors are channeling their cash to funds like 21 Shares, 3iQ, and Grayscale. This is totally different from last year when they pulled out their money from those crypto funds as a result of the harsh crypto winter coupled with several collapses of huge firms like FTX and Three Arrows Capital.
CoinShares reports that since the start of the year, there has been a decisive shift in investor sentiment. As of Monday, total investment assets under management had increased by 40% since January 1 and had a collective value of $30.2 billion. The figure is the highest since last August.
In addition, CoinShares noted that most investors were focused on the biggest coin by market capitalization, Bitcoin. According to the firm, BTC inflows were valued at $70 million last week, representing over 85% of the total inflows, as Ethereum came in second with 10%.
Drivers of Improved Investor Sentiment
James Butterfill, CoinShares Head of Research, claimed that the weakening dollar and the Fed’s move to soften monetary policy are the major reasons fueling change in investor sentiment. In its announcement last week, the Fed only raised interest rates by 25 basis points.
This shows that the central bank is slowing down on rate hikes compared to last year when it aggressively increased interest rates in an attempt to put inflation under control. Until November last year, the Fed was raising the rate by 75 basis points, then hiked it by 50 basis points in December.
Investors Await to Hear From Fed’s Chairman Today
Now investors are waiting to see if Jerome Powell, Fed’s Chairman, will give any updates about the central bank’s next step when he addresses the crowd at the Economic Club of Washington D.C today.
As everyone anticipates Powell’s speech, most of the top ten cryptos by market cap have been in the red. According to data from CoinGecko, Bitcoin is currently trading at $22,888, representing a drop of 0.2, while Solana plunged by 1.8% in the past 24 hours.
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