Crypto investments are soaring following the Fed's latest interest rate cut. CoinShares reported $321M in digital asset inflows last week. This increase followed the Federal Open Market Committee's decision to cut interest rates by 50 basis points.
Bitcoin led the charge, attracting $284M in inflows. Short-term Bitcoin products have also seen significant demand. Ethereum, however, suffered. It saw outflows for the sixth consecutive week, totaling $29M.
The rate drop sparked a bullish crypto market reaction. Total assets under management increased by 9%. Investment product volumes also increased by 9% to $9.5B.
Some analysts had projected a market crash following the rate decrease. However, Bitcoin products did well. Gold prices also rose, reaching a record $2,629 per ounce.
Analysts also agree that the rate cut might support gold's upward trajectory even further. That way, they suspect this is the beginning of a long-awaited interest rate reduction cycle. The Fed's decision represents the first fall in US borrowing costs since March 2020. It has reignited interest in various assets, changing the financial environment.
