Inflows into Crypto Investment Products Reach Highest Level Since July 2022
Last week, there was a significant increase in inflows into crypto investment products, reaching levels not seen since July 2022, according to data from CoinShares. This surge comes amid growing optimism that the Securities and Exchange Commission (SEC) may finally approve a spot bitcoin exchange-traded fund (ETF).
The total inflows amounted to $326 million, marking the highest weekly amount in 15 months. Bitcoin products accounted for 90% of the inflows, totaling $295 million.
James Butterfill, CoinShares’ head of research, attributed this momentum to the improving sentiment surrounding a potential bitcoin ETF approval. However, he noted that despite the positive inflow, it ranks only as the 21st largest on record, suggesting some investors are still exercising caution.
Surge in Inflow Thanks to Bitcoin Rally
The price of Bitcoin has experienced a 13% rally over the past week, reaching around $34,650 as of Monday morning.
Experts suggest that asset managers like BlackRock amending their bitcoin ETF filings indicates ongoing discussions with the SEC. The total assets under management in crypto products have now reached $37.8 billion, the highest since May 2022.
This marks the fifth consecutive week of net inflows, indicating renewed investor appetite. Canada and Germany saw the highest country inflows at $134 million and $82 million respectively. Only 12% of inflows came from the U.S., presumably because investors are awaiting a spot-based ETF approval.
The SEC has until January 10th to approve or deny spot bitcoin ETF applications from companies such as Ark Invest and 21Shares. It is anticipated that the first approval could trigger a significant influx of investments. Overall, there is ongoing optimism that 2023 may finally bring a spot bitcoin ETF to U.S. markets.
Hot Take: Increased Inflows into Crypto Investment Products Reflect Growing Confidence in Bitcoin ETF Approval
The recent surge in inflows into crypto investment products, reaching the highest level since July 2022, demonstrates the growing confidence in the potential approval of a spot bitcoin ETF by the SEC. The $326 million inflow, with Bitcoin products accounting for 90%, highlights the positive sentiment surrounding this development.
While this inflow ranks as the 21st largest on record, it signifies renewed investor interest and appetite for crypto investments. Notably, Canada and Germany saw the highest country inflows, indicating a global interest in this market. With ongoing discussions between asset managers and the SEC, there is hope that 2023 will bring the long-awaited approval of a spot bitcoin ETF in the U.S., potentially leading to a significant influx of investments.
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