According to data from digital asset manager Coinshares, digital asset investment products saw inflows of more than $117 million last week, marking the biggest weekly increase since last July. Among them, Bitcoin attracted the largest amount of investment with $116 million.
Total assets under management of crypto funds reached $28 billion, up 43% compared to November last year as the crash of FTX shocked the entire market. Now, investors are more confident than they were a month ago, Joseph Edwards, an investment consultant at Enigma Securities said.
Bitcoin price has increased by almost 40% in Jan 2023, closing in on its best monthly performance since October 2021. Its bullish combined with a possibly brightening macro picture make many investors believe that the crypto winter is finally over and the market might be verging on spring. Many investors also expect that the Fed will raise its key interest rate by only 0.25% this week, the smallest increase since their tightening cycle began last year.
“If peak inflation is indeed behind us for now, then long-term interest rates may move lower as we approach the end of the inflation-focused rate-hiking cycle. This could signal positive momentum on the macro front for assets such as Bitcoin”, according to a report by Fidelity Digital Assets.
Coinshares said that crypto trading volumes are on the rise with average weekly volume up 11% from last week, suggesting that investors are returning to the crypto market after months of gloom. However, the cryptocurrency is still not completely out of the danger zone as the Fed could take a more hawkish tone this week.
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