Cryptocurrency Investment Products See $243 Million Inflows in Final Week of 2023
In the last week of 2023, cryptocurrency investment products received significant inflows amounting to $243 million, contributing to a total inflow of $2.2 billion for the year.
The majority of these inflows were led by Bitcoin (BTC), which accounted for over $1.9 billion or 86% of the total. Solana (SOL) followed as the second-highest with $167 million in inflows.
Comparison to Previous Year and Shifting Trends
When compared to 2022, crypto investment products in 2023 saw higher inflows. In 2022, Bitcoin funds attracted $388 million, making up 47.5% of the total, while multi-assets followed with $272 million. Binance Coin experienced an outflow of $24 million.
The trend in crypto investment products shifted positively during the week of September 29, marking the beginning of the current bull market. Prior to that, these products faced outflows in eight of the previous nine weeks.
Bitcoin Surges to $45,000, Highest Level Since April 2022
Bitcoin’s price continued its upward trajectory into the new year, reaching $45,000 on January 2, which is its highest point since April 2022. This surge has been driven by anticipation for the approval of spot Bitcoin exchange-traded funds (ETFs).
The market’s interest in cryptocurrency investment products aligns with expectations for the approval of a spot Bitcoin ETF in the United States. Bitcoin’s price surpassed $45,000 as investors await potential approval from the U.S. Securities and Exchange Commission (SEC) for one or more pending applications.
Market Volatility and Potential SEC Rejection
However, recent market volatility has been evident, with rumors of a potential SEC delay in approving spot ETFs leading to over $460 million in longs liquidated across the crypto market. There are also reports that the SEC might reject spot Bitcoin ETF applications.
Despite this volatility, multi-asset and Binance exchange-traded products (ETP) experienced net outflows of $18 million and $1 million, respectively. Overall, 2023 surpassed 2022 in terms of higher inflows into digital asset investment products.
Hot Take: Crypto Investment Products Continue to Attract Inflows
The final week of 2023 saw significant inflows into cryptocurrency investment products, reaching $243 million. Bitcoin remained the dominant choice for investors, accounting for the majority of these inflows. The year 2023 also outperformed 2022 in terms of higher inflows into digital asset investment products. Additionally, Bitcoin’s price surged to its highest level since April 2022, driven by anticipation for the approval of spot Bitcoin ETFs. However, market volatility and rumors of a potential SEC rejection have led to liquidations and price drops. Despite this, the interest in cryptocurrency investment products remains strong.
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