Total Inflows into Crypto Investment Products Surpass $1 Billion Mark
Fueled by the historic launch of 10 spot Bitcoin ETFs, total inflows into crypto investment products exceeded $1 billion last week—a significant increase compared to the previous week. According to a report from CoinShares, global inflows into exchange-traded products (ETPs) reached $1.18 billion, with the United States contributing a net $1.24 billion to the crypto economy. Although these figures are impressive, they do not break any records. In October 2021, the crypto sector witnessed a record $1.5 billion in inflows in a single week due to the introduction of Bitcoin futures ETFs.
Spot ETFs vs. Bitcoin Futures ETFs
Bitcoin futures ETFs track the price of derivatives contracts, while spot ETFs actually involve buying and storing Bitcoin on behalf of clients. Last week set a different record with net trading volume for crypto industry ETFs surpassing $17.5 billion—the largest amount ever recorded in a seven-day period. The massive uptick is primarily attributed to the Bitcoin ETFs, which saw $4.5 billion worth of trading on their first day alone.
Outflows from Grayscale Bitcoin ETF
The Grayscale Bitcoin ETF experienced significant outflows last week, potentially due to its relatively higher fee compared to other products. However, analysts caution against placing too much emphasis on the opening performances of ETFs, as these financial products are typically approached with a long-term perspective by Wall Street investors.
Hot Take: Importance of Long-Term Perspective for Crypto ETFs
Last week’s surge in inflows for crypto investment products, driven by the launch of Bitcoin ETFs, is certainly noteworthy. However, it is essential to remember that ETFs are often viewed as long-term investments by Wall Street investors. Therefore, less emphasis should be placed on the initial performance of these products and instead focus on their potential in the broader crypto market.
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