Cryptocurrency Funds Add $585 Million in First Three Days of 2025
Record-Setting Year for Crypto-Based Exchange-Traded Products
Cryptocurrency funds, predominantly led by Bitcoin and Ethereum ETFs, have added $585 million worth of assets in the first three days of 2025 after ending the year with a big round of profit-taking and outflows. According to a new report from digital asset manager CoinShares, all told, $44 billion worth of assets flowed into such funds, more than four times the previous record from 2021.
Bitcoin Funds Account for 29% of Assets Under Management
Bitcoin funds now account for 29% of the assets under management being tracked by the European firm. On Friday alone, Bitcoin ETF issuers saw $908 million worth of shares sold, according to data from Farside Investors.
Market Expectations and Fed Rate Hike
“Bitcoin’s performance at the end of January will be a critical indicator,” wrote 10x Research CEO Markus Thielsen, in a note to investors. “Following the hawkish December FOMC meeting, Bitcoin ETF inflows have notably slowed, compounded by less favorable global liquidity conditions.” With 23 days to go, the CME Group FedWatch Tool shows that traders overwhelmingly expect that the Fed will keep rates the same.
Less Pronounced Effect on Bitcoin Price
Even if it does, it may not be a huge macroeconomic indicator for Bitcoin. For a while, each FOMC meeting that ended with no adjustment to the Fed’s key interest rate was calamitous for the price of Bitcoin. But since the Fed finally lowered rates in September—the first time in four years—the effect on the price has been less pronounced.
Analyst Expectations
Still, BRN analyst Valentin Fournier believes that any bullish price action that coincides with President-elect Donald Trump’s inauguration later this month could be followed by consolidation. “Since Christmas, Bitcoin has been on a strong upward trajectory. With no negative news on the horizon, this trend is likely to persist until Trump’s inauguration on January 20,” he wrote. “At that point, a pullback may occur unless market expectations are met. We recommend maintaining substantial exposure to digital assets, with a balanced allocation between Bitcoin and Ethereum based on their respective market caps.”
Conclusion
In conclusion, cryptocurrency funds have added $585 million worth of assets in the first three days of 2025, with Bitcoin funds accounting for 29% of the assets under management. Market expectations and the Fed rate hike will be crucial indicators for Bitcoin’s performance in the coming days.
FAQs
Q: What is the current trend in cryptocurrency funds?
A: Cryptocurrency funds have added $585 million worth of assets in the first three days of 2025, with Bitcoin funds accounting for 29% of the assets under management.
Q: What is the record-setting year for crypto-based exchange-traded products?
A: According to a new report from digital asset manager CoinShares, all told, $44 billion worth of assets flowed into such funds, more than four times the previous record from 2021.
Q: What is the current market expectation for the Fed rate hike?
A: With 23 days to go, the CME Group FedWatch Tool shows that traders overwhelmingly expect that the Fed will keep rates the same.
Q: How has the effect of the Fed rate hike changed on Bitcoin’s price?
A: Since the Fed finally lowered rates in September—the first time in four years—the effect on the price has been less pronounced.
Q: What is the analyst’s expectation for Bitcoin’s price action after Trump’s inauguration?
A: BRN analyst Valentin Fournier believes that any bullish price action that coincides with President-elect Donald Trump’s inauguration later this month could be followed by consolidation.
