Digital asset investment products recorded minor outflows last week, representing only the second week of outflows in the past four months amid rising interest by institutional investors following the launch of the first spot Bitcoin (BTC) ETFs in the U.S.
Evidence of the demand by institutions can be found in the trading volumes for listed Bitcoin products, which hit $11.8 billion last week, a figure that is “seven times the weekly trading volume in 2023,” according to James Butterfill, head of research at CoinShares.
The net flows for all funds show that $21 million was pulled from globally listed products as traders shifted their bets from Canadian and European-listed products to the newly launched ETFs in the U.S.
Digital asset fund flows. Source: CoinShares
As a result of the shift in funds, the U.S. recorded $263 million worth of inflows, while Canada saw $165.4 million in outflows to go along with a decline of $98.4 million in Germany.
Flows by country. Source: CoinShares
Switzerland and Sweden recorded $19.9 million and $13.3 million in outflows, respectively, bringing the total outflows to $297 million as investors migrated their assets to the U.S., “where fees are currently more competitive,” Butterfill said.
Overall, Bitcoin saw minor outflows totaling $25 million. The $11.8 billion in trading volumes “represented 63% of all Bitcoin volumes on trusted exchanges,” Butterfill said, which “highlights the ETP activity is currently dominating overall trading activity at present.”
Flows by asset. Source: CoinShares
Most of the other tokens saw a decline in assets under management as the focus shifted to Bitcoin, with Ethereum (ETH) losing $13.6 million, Solana (SOL) declining by $8.5 million, and Litecoin (LTC) decreasing by $1.5 million.
“Incumbent, higher cost issuers suffered in the US, seeing US$2.9bn of outflows since the newly issued spot-based ETFs were launched on 11th January 2024,” he said. “These newly issued ETFs have now seen a total of US$4.13bn inflows since launch, outstripping that lost from the higher cost incumbent ETPs. Investors saw recent price weakness as an opportunity to add to short-Bitcoin investment products, seeing US$13m inflows.”
Grayscale’s Bitcoin Trust (GBTC) was the primary source of outflows, losing $2.23 billion in value, while the iShares ETFs from BlackRock and the Fidelity ETFs recorded inflows of $931.1 billion and $860.4 billion, respectively.
Flows by provider. Source: CoinShares
“Blockchain equities saw further large inflows totaling US$156m, bringing the last 9 week run to US$767m,” Butterfill concluded.
As a result of the shift in fund flows and declines recorded in Bitcoin’s price, the sentiment in the crypto market has declined slightly but is once again in “Greed” territory after registering as “Neutral” last week.
Crypto Fear & Greed Index. Source: Alternative
