Crypto funds break 8-week outflow streak with $287 million inflow
Digital asset investment products recorded their first net inflow in eight weeks, bringing in $287 million (about ¥46.5 billion) for the week ending July 14, according to CoinShares' latest weekly report. The reversal ends a record outflow streak that saw a total of $8 billion (approximately ¥1.3 trillion) exit crypto funds over the prior eight weeks — the worst such period since CoinShares began tracking the data.
CoinShares noted that the shift in investor sentiment was triggered by softer-than-expected U.S. inflation data. The June Consumer Price Index (CPI) fell 0.4% month-over-month, beating the consensus estimate of a 0.2% decline, while the June Producer Price Index (PPI) dropped 0.3% against expectations of flat growth. These figures fueled hopes of easing inflation and prompted a reassessment of interest rate expectations.
Inflation data drives rate repricing, but caution persists
Following the CPI and PPI releases, market pricing for a September rate hike was cut in half — from more than one full hike previously to just half a hike, CoinShares reported. The improved sentiment translated into strong inflows on July 14 and 15, with $218 million and $197 million entering crypto funds respectively, mostly directed at Bitcoin-related products.
However, James Butterfill, CoinShares' head of research and author of the report, cautioned that the inflation improvement was largely driven by falling gasoline prices. He noted that the same decline also weighed on retail sales figures, and that "one weak employment report and one weak CPI are not enough" to trigger a rate cut — further macroeconomic deterioration would be needed. The report also warned that rising oil prices amid tensions in Iran could push inflation higher in the August data.
Butterfill added that if the economy slows gradually, growing rate-cut expectations could become a tailwind for Bitcoin. For now, CoinShares maintains that Bitcoin is near a bottom, but expects range-bound trading unless monetary policy expectations shift significantly.
Investor focus shifts to blockchain equities
The cautious stance is reflected in trading behavior. CoinShares observed that investor interest spikes near $120,000 but fades sharply around $60,000, suggesting the current price level encourages position building but not aggressive buying. The report identified blockchain-related stocks — equities of publicly listed companies in the sector — as the area attracting the most investor attention currently.
Meanwhile, institutional adoption continues. Morgan Stanley's E*TRADE launched crypto spot trading for its approximately 8.6 million households on July 16, and T. Rowe Price listed the industry's first active crypto ETF, "TKNZ," on NYSE Arca the same day. Market participants are now watching the next U.S. employment report and the July CPI due August 12 for clues on whether inflows will persist.