The January launch of spot Bitcoin (BTC) exchange-traded funds (ETFs) in the U.S. continues to be a driving force behind inflows into digital asset investment products as last week saw the second largest weekly inflows on record, with $1.84 billion flowing into globally listed products.
“Trading volumes in investment products reached a record of over US$30bn for the week, and at times represented 50% of global Bitcoin daily trading volumes on trusted exchanges,” said James Butterfill, Head of Research at CoinShares. “Total assets under management (AuM), after recent price rises, are now very close to the all-time high at US$82.6bn, just shy of the US$86bn peak set early November 2021.”
U.S. listed products recorded net inflows of $1.88 billion, highlighting that they have been the primary focus for investors, while products with higher fee structures recorded outflows.
The total flows were “subdued partially by a pick-up in outflows from incumbent Grayscale, which saw outflows totaling US$1.46bn in its Bitcoin ETF,” Butterfill said. “This was offset by new issuers, which saw a total US$3.2bn inflows last week.”
Flows were mixed in other regions, with Switzerland recording $20 million in inflows, while Sweden, Germany and Canada all saw outflows totaling $32 million, $35 million, and $23 million, respectively.
Bitcoin accounted for the lion's share of inflows with an increase of $1.72 billion, representing 94% of the total. The increase in BTC price emboldened short sellers, resulting in $22 million worth of inflows into short-Bitcoin investment products.
“Ethereum saw its largest weekly inflows since mid-July 2022, totaling US$85m last week, but AuM at US$14.6bn remains a way off the US$23.7bn peak,” Butterfill said. Polygon saw inflows of $7.6 million, representing 22% of AuM, while Solana recorded outflows of $12 million.
As Bitcoin marches toward a new all-time high before the halving for the first time in its history, the crypto community has become increasingly emboldened, sparking a wave of FOMO that is driving prices higher on Monday and has pushed sentiment in the ecosystem into ‘Extreme Greed’ territory, according to data provided by Alternative.
