Record Trading Volume for Global Digital-Asset Investment Products
Global digital-asset investment products offered by various asset managers experienced a surge in trading volume last week, reaching a record of over $30 billion. This was mainly driven by the trading of U.S. spot bitcoin exchange-traded funds (ETFs). CoinShares reported that at times, these investment products accounted for 50% of global bitcoin daily trading volumes on trusted exchanges. The U.S. spot bitcoin ETFs alone recorded a record trading volume of $22.3 billion, with daily volumes peaking at $7.6 billion.
Second-Largest Weekly Inflows
The crypto funds also saw their second-largest weekly net inflows on record, with an addition of $1.84 billion. Bitcoin investment products attracted the majority of these inflows, with 94% ($1.72 billion) going into bitcoin-related assets. U.S.-based funds dominated the inflows, totaling $1.88 billion for the week. While there were outflows from Grayscale’s higher fee fund amounting to nearly $1.5 billion, the newly launched U.S. spot bitcoin ETFs more than compensated for this by adding $3.2 billion worth of inflows.
Inflows and Outflows by Region
- Switzerland-based funds saw inflows of $20 million.
- Germany, Sweden, and Canada experienced outflows of $35 million, $32 million, and $23 million respectively.
Bitcoin Price Rise and Short Investors
The price of bitcoin increased by more than 20% last week, prompting short investors to invest an additional $22 million into short-bitcoin investment products. Despite this increase in short positions, the overall sentiment in the market remained bullish.
Other Cryptocurrencies
Ether-based investment products witnessed their largest weekly inflows since July 2022, adding $85 million. However, the assets under management (AUM) for these products are still around 40% below their peak. Polygon-based funds attracted inflows of $7.6 million, while Solana products experienced outflows of $12 million for the third consecutive week.
Total Assets Under Management
With recent price increases, the total assets under management (AUM) for digital-asset investment products are now close to their all-time high at $82.6 billion. This is just shy of the peak of $86 billion set in early November 2021.
Hot Take: Record Trading Volume and Inflows Highlight Strong Demand for Crypto Investment Products
The record trading volume and inflows into global digital-asset investment products demonstrate the growing demand for crypto among investors. Despite price volatility, bitcoin continues to attract significant investments, particularly through spot ETFs. The launch of U.S. spot bitcoin ETFs has provided a new avenue for investors to gain exposure to bitcoin, leading to a surge in trading volumes and net inflows.
Ethereum and other altcoins are also gaining traction, with ether-based investment products experiencing their largest weekly inflows since July 2022. While the AUM for these products still lags behind their previous peak, the increased investor interest indicates a positive outlook for the broader crypto market.
Overall, the strong trading volumes and net inflows into digital-asset investment products highlight the growing acceptance and adoption of cryptocurrencies as an asset class. As more institutional investors enter the space and regulatory frameworks continue to develop, we can expect further growth in this sector.
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