Crypto Investment Inflows Surge to $1.2 Billion as Market Optimism Grows Ahead of Q4

Last week, crypto investment inflows hit $1.2 billion. This marks three weeks of positive growth since September 9. Exciting, right? The market is buzzing with optimism, thanks to some favorable economic news and other positive developments in finance.

Interestingly, September broke its usual trend of poor performance. It set a strong stage for Bitcoin (BTC) and the broader crypto market as we head into October.

Digital asset investment products saw a total inflow of $1.2 billion last week. Bitcoin led the way with $1.070 billion in positive flows. Short-Bitcoin products also attracted $8.8 million. Plus, Ethereum (ETH) ended a five-week streak of outflows, bringing in $87 million. This signals a return of positive sentiment.

Looking at the regions, the US took the lead with $1.17 billion in inflows. The latest report from CoinShares attributes this to positive economic data coming from the country.

The Federal Reserve’s recent 50 basis point interest rate cut in September has created a wave of liquidity. This has been a boon for riskier assets like Bitcoin. As inflation cools, markets are now anticipating further rate cuts by the end of the year.

The report also highlights that the approval of options trading in the US has fueled crypto investment inflows. BlackRock’s spot Bitcoin ETF recently got the green light for options trading from the US Securities and Exchange Commission (SEC). This is expected to boost liquidity and market stability. It also opens up discussions for potential Ethereum ETF approvals.

According to the report, “Digital asset investment products saw a third consecutive week of inflows totaling $1.2 billion. We believe this is a reaction to ongoing expectations of dovish monetary policy in the US. The approval of options for certain US-based investment products likely boosted sentiment.”

In other news, hedge funds are predicting a Bitcoin rally in the fourth quarter (Q4). This comes after Bitcoin’s strongest September close on record. Historically, Bitcoin has struggled in September, often showing negative returns. But this year, it defied expectations with a rise of about 20%.

ZX Squared Capital believes the upcoming US elections will further boost Bitcoin, regardless of the outcome. They argue that both political parties have not adequately addressed the rising national debt and deficits. This, they believe, will strengthen Bitcoin’s position after the elections.

Similarly, analyst Crypto Rover expects Bitcoin’s best price performance to happen in Q4. He points to historical trends following halving events. Bitcoin has a history of rallying in Q4, especially in halving years like 2020. With traders and investors hoping for a potential all-time high in 2024 or soon after, this optimism could attract more retail interest, increase media coverage, and drive greater adoption.