(Kitco News) – Digital asset investment products have returned to their winning ways as last week saw inflows for the second straight week, with a total of $932 million flowing into globally listed crypto funds.
“Despite the pickup in inflows, volumes were only US$10.5bn for the week in comparison to US$40bn in March,” said James Butterfill, head of research at CoinShares. “Interestingly, the inflows were an immediate response to the lower-than-expected CPI report on Wednesday, with the latter 3 trading days of the week making up 89% of the total flows, highlighting our view that Bitcoin prices have recoupled to interest rate expectations.”
The U.S. continues to be the primary source of flows, accounting for $1.002 billion worth of inflows last week, while Switzerland and Germany also saw minor inflows of $27 million and $4.2 million, respectively. “Unusually, Grayscale, which has suffered US$16.6bn of outflows since the January ETF launch, also saw minor inflows for the first time totaling US$18m,” Butterfill noted.
The positive inflows were slightly offset by outflows of $83 million from Hong Kong, $17 million from Canada, and $5.9 million from Sweden.
Outflows of $23.3 million from Ethereum (ETH) products also decreased the net flow, while Bitcoin saw $942 million of inflows “with virtually no flows into short Bitcoin, implying a positive outlook amongst investors,” Butterfill said.
Multiple altcoins recorded inflows, the most notable of which were Solana, Chainlink, and Cardano, which increased by $4.9 million, $3.7 million, and $1.9 million, respectively.
“Blockchain equities continue to suffer outflows, with only 6 of the 20 weeks this year seeing inflows,” Butterfill concluded. “Year-to-date, they have seen US$512m outflow so far.”
With Bitcoin spiking back above $70,000 on Monday, Sina G., a professor and co-founder of 21st Capital, said, “ETF flows [are] still correlated well with price,” and “flows being back to solid positive implies bullish price movement.”
“Essentially, ETF flows give us a window into what Wall Street thinks about Bitcoin,” he added. “Price pumps that also coincide with positive ETF flows are most reliable.”
And according to Thomas Fahrer, co-founder of Apollo, Bitcoin could soon see its price surge higher as the reserve held on exchanges is now at an all-time low while major institutions have started to make allocations towards Bitcoin ETFs.
#Bitcoin Exchange Reserves are at all time lows.
Right on time for a second wave of ETF Flows.
Demand shock + Inelastic supply = ??? pic.twitter.com/Ku9B4UVk4R— Thomas | heyapollo.com (@thomas_fahrer) May 20, 2024
