(Kitco News) – The streak of positive inflows into globally listed digital asset products extended to four consecutive weeks on Friday as total assets under management for all crypto funds increased by $185 million, with May recording total inflows of $2 billion.
The increase was enough to “push year-to-date inflows past the US$15bn mark for the first time on record,” according to James Butterfill, head of research at CoinShares. “Volumes were down for the week though, falling to US$8bn, relative to US$13bn the week prior.”
The U.S. continues to account for the bulk of flows, with a net $130 million flowing into United States-listed exchange-traded funds (ETFs), “although incumbent ETF issuer outflows rose to US$260m,” Butterfill said. “Switzerland saw its second largest week on inflows this year at US$36m, while Canada saw a turnaround with inflows of US$25m despite seeing a net outflow in May totalling US$39m.”
Bitcoin (BTC) recorded $148 million in inflows, while short-Bitcoin products saw another week of outflows totaling $3.5 million, which indicates sentiment among ETF investors remains positive.
Ethereum (ETH) saw a second week of inflows following the SEC approval of a spot-based ETF with an expected July 2024 launch date.
“This represents a turnaround in investor sentiment in an asset that had seen a 10-week run of outflows prior, totalling US$200m,” Butterfill said. “This positive news for Ethereum has also had an impact on Solana, which saw a further US$5.8m inflow last week.”
But despite strong recent direct investment in digital assets, “blockchain equities have suffered, seeing US$7.2m outflows last week and US$516m this year,” Butterfill concluded.
First spot BTC ETFs in Australia set to launch
Positive flows into Bitcoin-related products are expected to continue for at least one more week as Australia is set to launch its first spot BTC ETF – the Monochrome Bitcoin ETF (IBTC) – on Tuesday.
Australia already has several exchange-traded products (ETPs) that offer exposure to Bitcoin, but Monochrome Asset Management is the first to get approval under a new crypto asset licensing category made under Australian Financial Services (AFS) licensing rules in 2021. The main difference between Monochrome and the other ETPs is that it allows the ETF to hold Bitcoin directly.
“Before IBTC, Australian investors were only able to invest in ETFs that indirectly hold Bitcoin or through offshore Bitcoin products, both of which don’t benefit from the investor protection rules under the directly held crypto asset AFS licensing regime,” Monochrome said in a statement.
The product also allows in-kind redemption from investors, unlike its U.S. counterparts which only offer a cash-create option.
Monochrome previously announced that they intended to launch the product on the country’s smaller Cboe exchange, making the platform the first in Australia to list a Bitcoin ETF. Sources at the larger Australian Securities Exchange (ASX) have indicated that ASX is also likely to approve spot Bitcoin ETFs before year-end as Australian financial institutions increasingly recognize Bitcoin’s potential for the industry.
